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Sample EMI calculation for a loan of 100000 for 12 months at 11.5% per year

EMI: **8861.51**, Total Interest: **6338.12**

__Loan repayment schedule__

Sl. | Interest | Principal | Balance |
---|---|---|---|

1 | 958.33 | 7903.18 | 92096.82 |

2 | 882.59 | 7978.92 | 84117.9 |

3 | 806.13 | 8055.38 | 76062.52 |

4 | 728.93 | 8132.58 | 67929.94 |

5 | 651 | 8210.51 | 59719.43 |

6 | 572.31 | 8289.2 | 51430.23 |

7 | 492.87 | 8368.64 | 43061.59 |

8 | 412.67 | 8448.84 | 34612.75 |

9 | 331.71 | 8529.8 | 26082.95 |

10 | 249.96 | 8611.55 | 17471.4 |

11 | 167.43 | 8694.08 | 8777.32 |

12 | 84.12 | 8777.39 | 0 |

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In general, banks finance upto 90% of the cost of a property or vehicle; the loan amount is paid back with an equal amount every month. EMI, short for equated monthly installments, is the monthly repayment amount for loans taken from banks and NBFCs. The calculation of EMI is the same for all kinds of loan; be it, home loan, car loan or personal loan.

The formula for calculating EMI is based on the formula for present value of annuity:-

E = A . r(1+r)^{n} / ((1+r)^{n} - 1)

Where,

A = Amount borrowed

E = EMI or Monthly payment

r = interest rate in % divided by 12

n = total number of months

The repayment of loans through regular payments is also called amortization. The amortization schedule will tell you the total interest paid and the amount of outstanding loan after each payment.

Disclaimer:- The content of this website does not constitute financial advice and is solely meant for information purpose. The calculations are accurate as per the prescribed formula.