- Ref:: Corporate Finance Institute
- Title:: What is an Equated Monthly Installment (EMI)?
- Year of publication::
- Category:: Blog
Notes from reading
- An equated monthly installment (EMI) is a type of payment made by borrowers to lenders on a monthly basis in a fixed amount.
- EMIs include both the interest and principal amounts.
- After a certain number of EMIs are made, the loan will be fully paid off.
- A = Periodic EMI amount
- P = Principal borrowed
- r = Periodic interest rate (annual interest rate/12)
- n = Total number of payment (number of months during the loan tenure)
NOTE: the period can be month, year or whatever equal period you can imagine. Just make the appropriate change for
NOTE: Or simply use PMT function in Excel. Try this example spreadsheet