What is EMI?

EMI (Equated Monthly Installment) is the fixed payment made by a borrower to a lender at a specified date each month.

How is EMI Calculated?

Formula: EMI = [P × r × (1 + r)^n] / [(1 + r)^n – 1]

Where:
P = Loan Amount
r = Monthly Interest Rate (Annual Rate / 12 / 100)
n = Total Number of Monthly Payments

Benefits of EMI Calculation

• Helps in financial planning
• Determines affordability of a loan
• Easy breakdown of interest and principal