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What is EMI? How do I calculate EMI manually?

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posted Jun 20 by Debolina Charaborthy

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1 Answer

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The amount which is paid by the borrower each month to the lender against the loan amount is termed as EMI. It can be calculated for a car loan, home loan, bike loan, personal loan etc.

It is calculated by following below mentioned mathematical formula:
[P x R x (1+R)^N]/[(1+R)^N-1
where P stands for the loan amount or principal,
R is the interest rate per month [if the interest rate per annum is 11%, then the rate of interest will be 11/(12 x 100)],
and N is the number of monthly installments
This basic formula works behind EMI calculator also.

answer Jun 21 by Amrita
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