Table of Contents
What is EMI?
Full form of EMI is Equated Monthly Installment, It is a fixed amount paid monthly by debtors to creditors for paying a loan, involving both component together principal and interest components.
The EMI contains two components: Principal amount and the interest amount, EMI depends upon the interest rate (%) and tenure (in months) of loan repayments.
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What is principal amount?
The principal amount is the amount which is borrowed or invested. It is the original sum of money on which interest is calculated, and it helps to calculate EMI amount.
Calculation involves for EMI calculation.
EMI = P × r × (1 + r)n/((1 + r)n – 1)
P= Loan amount, r= interest rate, n=tenure in nos. of months.
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You can also check link for latest interest rate or please visit bank sites of individual bank.