EMI calculator is a mathematical mechanism to calculate all types of loans EMI.
What is EMI in EMI Calculator
EMI is abbreviated as Equated Monthly Installment. This means a fixed amount of payment, which the borrower repays to a lender on a certain date every month as a loan repayment. Your EMI constitutes the principal also because of the interest components. During the initial years, the principal portion is less than the interest portion, which is calculated on the principal outstanding.
When people do not have enough money to carry out their business functions or to fulfill any requirement, they resort to ‘loan’. Banks do the job of giving out loans. To compensate for the loan taken from the bank, the bank gives you the facility to repay the loan amount in installments.
The formula for EMI Calculation in EMI Calculator
EMI calculation depends on three factors – loan amount, interest rate and loan term.
EMI Calculation Formula is [P x R x (1+R)^N]/[(1+R)^N-1], Where p is the principal (loan) amount, r is the rate of interest per month and n is the number of monthly installments.