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Emi calculation

GUNASEKARAN.S (Accountant) (122 Points)

12 May 2015

QUESTION : HOW TO CALCULATE EMI AND HOW SHOULD FIND OUT EMI PRINCIPAL AND EMI INTEREST?

FOR AN EXAMPLE , OUR FIRM HAVE A LOAN FROM LIC HOUSING FINANCE LIMITED..

LOAN AMOUNT : 3200000/-.

REPAYMENT TERMS : 20 YEARS.

INTEREST RATE : 10.95%

THEN HOW TO FIND OUT

1.EMI

2.EMI PRINCIPAL

3.EMI INTEREST?

PLEASE EXPALIN WITH EXAMPLE..ANY FORMULA FOR THIS?

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8 Replies

CMA Poornima Madhava (CMA) (13112 Points)
Replied 12 May 2015

Hope this link gives answer to all yr questions https://emicalculator.net/

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Eliyavan (Assistant Professor) (31 Points)
Replied 12 May 2015

Well, you have stated the Principal Amount, Interest Rate, Duration in years, but generally the duration of 20 years are spresd over (20*12=) 240 months. I assume you ask for an EMI for 240 months. The standard formula is: EMI = {P [r / (1- (1+r)^(-n)]} For your First Question, P = 3200000; r = (10.95/100 X 1/12) (this gives Interest Rate Per Month)and n = 240 months. Use a scientific calculator to solve the above formula and the EMI answer is Rs.32,921.216 per month. The answers for Second and Third Questions are time-consuming job, because as the EMI remains constant, the amount of Principal Amount you pay through the EMI slowly increases month after month; on the same way the Interest Amount you pay decreases month after month. Therefore you must work 240 times to know about the Principal and Interest Amount of each month's EMI. However, suppose you have properly paid the EMI for 3 years (or 36 moths), you can easily find out the remaining Unpaid Principal Amount by slightly manipulating the above EMI formula. If you are interested to know, please reply and I will let you learn. With regards, Eliyavan

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GUNASEKARAN.S (Accountant) (122 Points)
Replied 13 May 2015

THAKNS FOR YOUR VALUABLE REPLY...PLEASE TELL ABOUT THE LAST SESSION FORMULA...

Eliyavan (Assistant Professor) (31 Points)
Replied 13 May 2015

The last formula is just the inverse of the previous EMI formula with a small change in the value of P. Here, P is taken as the EMI amount you pay each month. The formula is: Unpaid Principal Amount=EMI( (1-〖(1+r)〗^(-n))/r) Out of 240 months, you have sincerely paid for 36 months. The remaining unpaid periods are 240 – 36 = 204. This is n. The r value is the same 0.009125. Therefore the Unpaid Principal Amount is Rs.30,42,255.88 With regards, eliyavan

Shruthi (Student Others) (25 Points)
Replied 14 December 2016

Hey,

The Mathematical formula for calculating EMI = [P x R x (1+R) ^n] / [(1+R)^ n-1].

P is the principal loan amount,

R rate of interest per month and

N is the the number of monthly instalments

Manual calculations are too complicated to perform accurately, which is why many borrowers are left confused after availing a loan. Understanding this pain-point led BankBazaar to develop one of the easiest and most user-friendly online EMI Calculator

Thanks,

Shruthi

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Vanshika Kumari (Techie) (23 Points)
Replied 17 July 2017

Hi,

Previously it was difficult to calculate Home Loan EMI. There used to be a dependency on bank for knowing home loan EMI. But now, you can check online for your Home Loan EMI. The basic formula to calculate EMI is P x r x (1+r)^n/((1+r)^n -1) . But you can check here, Home Loan EMI Calculator which is an online tool to calculate Home Loan EMI. You need to give your Loan amount, tenure, interest rate and processing fee. Then the tool will give you the EMI.

Thanks,

Vanshika

Finance Seva (8 Points)
Replied 29 October 2021

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Finance Seva (8 Points)
Replied 29 October 2021

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