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EMI CALCULATION FORMULA
EMI= P x r x (1 + r)^n / ((1+r)^n -1)
Here
p = principal amount (loan taken)
r = interest rate per month (ex: if interest rate per annum is 10% then 10/(12*100))
n= tenure in months
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EMI examples,
If the Loan taken = 1,00,000 at the rate of 12% interest for the period of 2 Years. Then, EMI will be,
p = Loan taken = 1,00,000
r = interest rate per month = 1% = 0.01
n= tenure in months = 2 Years = 24 months
EMI
= 100000*0.01*(1+0.01)^24 /((1+0.01)^24 -1)
= Rs. 4707
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If the Loan taken Rs 1 Lakh at 11 percent per annum, repayable in 15 years, the EMI will be :
Here,
p = Loan taken = 1,00,000
r = interest rate per month = 0.11/12 = 0.00916
n = tenure in months = 15 Years = 180 months
EMI
= (100000 x .00916) x ((1+.00916)^180 ) / ([(1+.00916)^180] – 1)
= 916 X (5.161846 / 4.161846)
= Rs. 1,136
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Calculate the EMI for a loan of Rs. 10,00,000 @ interest rate of 9 per cent p.a. for 15 years.
p = Loan taken = Rs. 10,00,000
r = interest rate per month = 0.09/12 = 0.0075
n = tenure in months = 15 years = 180 months
EMI
= ((10,00,000 x 0.0075) x (10.0075)^180) / ([(1+0.0075)^180]-1 )
= Rs. 10,142.67
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