vignesh S 23UCM037

                        1year b.com

                               Unit 2

              Equated Monthly Installment 

EMI stands for "Equated Monthly Installment." It's a fixed amount of money paid by a borrower to a lender at a specified date each calendar month. EMIs are commonly used for loans, such as home loans or car loans, where the borrower repays the loan amount with interest over a set period, typically in equal monthly payments. The EMI amount comprises both the principal loan amount and the interest on the loan.The formula to calculate the Equated Monthly Installment (EMI) for a loan can be derived from the following formula:

EMI = P * r * (1 + r)^n / ((1 + r)^n - 1)

Where:

- EMI is the Equated Monthly Installment.

- P is the principal loan amount (the initial loan amount).

- r is the monthly interest rate (annual interest rate divided by 12 months and expressed as a decimal).

- n is the number of monthly installments or loan tenure in months.

You can use this formula to calculate your EMI for a loan, given the principal amount, annual interest rate, and loan tenure in months. Keep in mind that this is a simplified formula, and in practice, lenders may use slightly different methods for EMI calculation.The Equated Monthly Installment (EMI) is a fixed amount of money that a borrower pays to a lender on a monthly basis when repaying a loan. It includes both the principal loan amount and the interest on the loan. The EMI remains constant throughout the loan tenure, making it easier for borrowers to plan their monthly budget.

To calculate the EMI, you can use the formula I mentioned earlier:

EMI = P * r * (1 + r)^n / ((1 + r)^n - 1)

Where:

- EMI is the Equated Monthly Installment.

- P is the principal loan amount.

- r is the monthly interest rate (annual interest rate divided by 12 months and expressed as a decimal).

- n is the number of monthly installments or loan tenure in months.

By plugging in the values for P, r, and n, you can determine the EMI for a specific loan.