EMI Calculator
Understanding EMI: Your Monthly Loan Payment
EMI stands for Equated Monthly Installment. It's the fixed amount that a borrower pays to a lender every month on a specific date, for a defined period, to repay a loan. EMI payments include both the principal amount borrowed and the interest charged by the lender.
How is EMI Calculated?
The calculation of EMI is based on a standardized formula that takes into account the principal loan amount, the annual interest rate, and the loan tenure (in months). The formula is:
EMI = P × r × (1 + r)n / ((1 + r)n – 1)
Where:
- P = Principal Loan Amount
- r = Monthly Interest Rate (Annual Interest Rate / 12 / 100)
- n = Loan Tenure in Months
Why is an EMI Calculator Useful?
An EMI calculator simplifies this complex calculation, allowing you to quickly estimate your monthly repayment amount. This is crucial for financial planning, as it helps you:
- Budget Effectively: Know exactly how much you need to set aside each month.
- Compare Loan Offers: Easily compare different loan products from various lenders by looking at their respective EMIs.
- Assess Affordability: Determine if a particular loan amount and tenure fit your budget.
- Understand Interest Costs: See how changes in interest rate or tenure affect the total interest paid over the life of the loan.
Example Calculation
Let's say you are taking a personal loan of ₹5,00,000 with an annual interest rate of 10% for a tenure of 5 years (60 months).
- Principal Loan Amount (P) = ₹5,00,000
- Annual Interest Rate = 10%
- Monthly Interest Rate (r) = (10 / 12 / 100) = 0.0083333
- Loan Tenure (n) = 60 months
Using the EMI formula, the calculated EMI would be approximately ₹10,626.54.
This means you would pay ₹10,626.54 every month for 60 months to repay your loan of ₹5,00,000 with a 10% annual interest rate.
function calculateEMI() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var loanTenure = parseFloat(document.getElementById("loanTenure").value);
var resultDiv = document.getElementById("result");
if (isNaN(loanAmount) || loanAmount <= 0) {
resultDiv.innerHTML = "Please enter a valid loan amount.";
return;
}
if (isNaN(annualInterestRate) || annualInterestRate <= 0) {
resultDiv.innerHTML = "Please enter a valid annual interest rate.";
return;
}
if (isNaN(loanTenure) || loanTenure <= 0) {
resultDiv.innerHTML = "Please enter a valid loan tenure in months.";
return;
}
var monthlyInterestRate = (annualInterestRate / 12) / 100;
var numberOfMonths = loanTenure;
// Calculate EMI
var emi = loanAmount * monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfMonths) / (Math.pow(1 + monthlyInterestRate, numberOfMonths) – 1);
var totalInterest = (emi * numberOfMonths) – loanAmount;
var totalPayment = emi * numberOfMonths;
resultDiv.innerHTML =
"
Your EMI Details
" +
"
Monthly EMI: ₹" + emi.toFixed(2) + "" +
"
Total Interest Payable: ₹" + totalInterest.toFixed(2) + "" +
"
Total Payment (Principal + Interest): ₹" + totalPayment.toFixed(2) + "";
}
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