Posting this message for the benefit of other folks like myself who want to know the formula used for calculating the EMI. I found this info at: http://mathforum.org/dr.math/faq/faq.interest.html
EMI = Pi/[q(1-[1+(i/q)]^-nq)]. P = Loan Amount, or, Principal Amount i = Interest Rate per Year q = no of payment periods per year n = no of loan years
So, if you wanted to calculate the EMI for a loan amount of Rs.100000, with an interest rate of 7.25% per year, payable in monthly installments over 5 years:
RE:EMI Calculation Example
by pritesh on Mar 05, 2006 09:50 AM Permalink
Hello sir/madam If we want to calculated Annual and dailt rest then how you fine that .
RE:EMI Calculation Example
by suresh Vaze on Sep 03, 2006 01:18 PM Permalink
this is really a good article...keep transferring such good knowledge... keep this good work going...
Why can't you provide an example as to how to work out the emi given the amount of loan, rate of interest and period of loan. This would have provided the readers to check whether they are paying correct EMI
Not a bad Article. One key point I am afraid has not been discussed at length. The EAI has a big role to play in determining the EMI. Most Financiers do not give the Benefit of working the Interest Rate on the "Diminishing Balance" on a Monthly Basis. In most cases it is on An Annual Basis which is detrimental to the Borrower.
If you take a Recurring Deposit with a Bank for 60 months OR you take a Loan with the same Bank for 60 equated monthly payments in both the cases the Interest is calculated on a Monthly Basis.
Most guys who want a loan are ever willing to sign on dotted lines..........
The article was crisp and very helpful. For the first time I understood what is this EMI and EAI, eventhough I have taken a Personal loan and Home loan. Good work...
