The document explains the formula to calculate the equated monthly installment (EMI) for a loan. The EMI is calculated by multiplying the principal amount by the interest rate and a compound interest factor, and dividing by a factor based on the number of payments and interest rate. It provides an example calculation for a Rs. 12,00,000 loan over 240 months at 8.75% interest, resulting in a monthly EMI of Rs. 10,604.83. Excel's PMT function can also be used to calculate the EMI.

1. EMI CALCULATION EQUATED MONTHLY INSTALMENT

2. FORMULA EMI = P × R × (1 + R) N [(1 + R) N – 1] P = Principle Amount ( Loan Required/Sanctioned) R = Rate of Interest per annum for E.g ROI = 8.75% Then R = 8.75/12/100= 0.00729166666666667 N = Repayment Period (Total number of months Or No. of installments)

3. For Example Loan amount = Rs. 12,00,000 Rate of Interest = 8.75% Number of years = 20 Yrs i.e. 240 Months Then EMI = P × R × (1 + R) N [(1 + R) N – 1] R = 8.75/12/100= 0.00729166666666667 EMI = 12,00,000 × 0.00729166666666667 × (1 + 0.00729166666666667 ) 240 [(1 + 0.00729166666666667 ) 240 – 1] EMI = Rs. 10,604.83

4. Excel Calculation Go to Fx and select PMT from Financial.

5. Rate = 8.75%/12 Nper = 240 months Pv = Rs. 12,00,000 Press OK. Value will Be in Red As (10,604.53)

6. THANK YOU