Equated Monthly Installment (EMI) calculator is a fixed payment amount made by a borrower to a lender at a specified date.
| P x | APR N | ||
| 1 - ( 1 + | APR N | )(-N x Y) |
P = Loan amount
APR = Annual percentage rate
N = Number of payments per year (monthly payment means 12 payments in a year)
Y = Term of the loan (number of years)
But if the interest rate is equal to zero:
EMI = Loan amount ÷ Total number of payments
Example: calculate the monthly payment for a loan of $50,000 at an annual rate of 6% and a 5-year term.
EMI =
| P x APR/ N |
| 1 - (1 + APR/N) (-N x Y) |
| 50,000 x 0.06 ÷ 12 |
| 1 - (1 + 0.06 ÷ 12) (-12 x 5) |
| 250 |
| 0.259 |
monthly payment = $966.64
total payment number = 12 x 5 = 60 payment
total payment = 60 x 966.64 = $57,998.4
total interest = 57,998.4 - 50,000 = $7,998.4