Full form of EMI in banking is equated monthly installment is a fixed payment amount paid by the borrower to a lander each month on a specified date. It is used to pay the loan amount taken by the borrower from the lander in a specified period of time. It is used to pay off both principal with its interest in each month so that loans could be repaid in a given period of time. This method is used to pay a lone such as real estate mortgages, auto loans, and student loans. The borrower has to pay fixed periodic payment to
the lander over several years to repay the money.
How to calculate EMI
It is also important to know how to calculate EMI so that you can cross-check that with what you have Paid per Month.
Many people today are confused that if the lender is charging them a fair amount of EMI or not. So to clear your cloud of doubts you should learn how to calculate EMI and acrostic by your own that you are paying a fair amount or not.
The easiest way to calculate EMI is by using Excel spreadsheets. In a spreadsheet function for calculating the EMI is PMT. For calculating this you need 3 variables. These are the rate of interest (rate), present value (PV), number of periods (nper).
And the formula to calculate the EMI is
=PMT(rate ,nper, PV)
By using a mathematical formula
It is true that you cannot access Excel spreadsheets everywhere. In such cases you need your mathematical mind to calculate your EMI. And the mathematical formula to calculate EMI is
EMI = [P x R x (1+R)^N]/[(1+R)^N-1], VIP stands for the amount of the principal, R stands for the interest rate, and N is the number of monthly installments.
This was all about EMI and the full form of EMI.
May this article help you to solve all your doubts related to EMI. Thank you love you all.
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