Equated Monthly Installment (EMI) is the fixed monthly payment made by a borrower to a lender (like a bank or NBFC) on a specified date each calendar month. EMIs are applied to both interest and principal each month, so that over a specified number of years, the loan is paid off in full.
The mathematical formula to calculate EMI is: E = P x R x (1+R)^N / [(1+R)^N-1]. Here, E stands for EMI, P represents the Principal Loan Amount, R indicates the rate of interest calculated on a monthly basis, and N is the loan tenure in months. JMD Fintech's calculator simplifies this complex calculation into a highly interactive process.