Which function is used to calculate the interest amount of the EMI in Excel?
PMT, one of the financial functions, calculates the payment for a loan based on constant payments and a constant interest rate.
Which function is used for calculation of interest amount in EMI?
Calculating EMI has a Simple Formula, Which is As Follows: EMI = (P X R/12) X [(1+R/12) ^N] / [(1+R/12) ^N-1]. Here, P is the original loan amount or principal, R is the rate of interest that is applicable per annum and N is the number of monthly installments/ loan tenure.
What is the method of calculating EMI?
The EMI amount is calculated by adding the total principal of the loan and the total interest on the principal together, then dividing the sum by the number of EMI payments, which is the number of months during the loan term.
How to calculate EMI interest with example?
Example: if a borrower takes ₹10,00,000 from the bank at 10.5% annual interest for 10 years (i.e., 120 months), what will be the EMI? then EMI = ₹10,00,000 × 0.00875 × (1 + 0.00875)120 / ((1 + 0.00875)120 – 1) = ₹13,493. The monthly EMI ₹13,493 for 120 months takes to repay the entire loan amount.