💰 Loan EMI Calculator
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📌 Understanding Loan EMI Calculation
EMI (Equated Monthly Installment) is calculated using the formula:
- EMI = [P × R × (1+R)^N] / [(1+R)^N – 1]
- Where:
- P = Loan amount
- R = Monthly interest rate (Annual rate / 12 / 100)
- N = Total number of months (Years × 12)
📌 Example Calculations
| Loan Amount (P) | Interest Rate (R%) | Tenure (Years) | EMI |
|---|---|---|---|
| $100,000 | 8% | 5 | $2,028.64 |
| $500,000 | 10% | 10 | $6,607.59 |
| $1,000,000 | 7% | 15 | $8,988.52 |
🔧 Practical Applications of Loan EMI Calculation
1. Home Loans: Helps in determining monthly payments for mortgages.
2. Car Loans: Assists in calculating EMIs for vehicle financing.
3. Personal Loans: Useful for planning monthly repayments.
❓ FAQs
Q1: How do I calculate EMI?
✅ Use the formula EMI = [P × R × (1+R)^N] / [(1+R)^N – 1]
Q2: What happens if I pay extra on my EMI?
✅ Making extra payments reduces the loan tenure and total interest paid.
Q3: Can EMI amount change?
✅ Yes, EMI can change if there is a floating interest rate.
Q4: Where is EMI calculation commonly used?
✅ It is widely used in bank loans, mortgages, and financial planning.
Q5: Why is EMI calculation important?
✅ It helps in understanding loan affordability and budgeting effectively.