Excellent article. Can you also do an article on floating interest loans, where when the interest rate goes up, the EMI remains constant, but the time period of repayment increases. If you could let us know how to calculate the new time period of repayment when the interest goes up by say 0.5 % midway during the period of repayment. Thank you. Vijaya
THE PMT,IPMT and all functions do help us to calculate the EMI but they cannot be used as it is. The company offering you loan have a chart which they name "something" which I am not aware. The calculation we do are nearly same if not exact.
Although the article regarding " how emi's are calculated is highly useful, even for a layman, one thing that is required that has not been paid attention, is .
given the no. of emi's, amount per emi, and the loan acquired(present value of the loan)
how can one calculate the rate using the given data above.
Thanks for the Information. i really got to know about EMI calculations. But it could be well if it was explained with generic method instead of using Excel inbuilt methods
A good article. Very informative. But the calculations discussed here revolve around the in-built functions given by Microsoft people in MS-Excel. But if the Microsoft people left defects in that program, and it is quite possible that they might have, then it is anybody's guess, we might never know if we had been paying more or less than what we should have paid.
To many people, this might sound like re-inventing the wheel, but I would like to know how I can calculate the EMIs for a loan manually without taking the help of the program written by Microsoft using a pen, paper and an electronic calculator. That would be very helpful.
