What is EMI?

Equated Monthly Installment (EMI) is a fixed payment amount made by a borrower to a lender at a specified date each calendar month. EMIs are paid on a regular basis and include both principal and interest components. The formula is: EMI = [P × r × (1+r)^n] / [(1+r)^n − 1], where P is the principal, r is the monthly interest rate, and n is the number of monthly installments.