1 / 6

School of Equity

We aim to make you smart equity professional either be an investor or a trader by providing you practical oriented knowledge as working in big corporate with practical experience is completely different from what you learn.We also assist you with the experien

schoolofequity
Download Presentation

School of Equity

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. School of EquityWhat is EMI and how to calculate it

  2. We School of Equity aim to make you a smart equity professional, whether you are an investor or a trader, by providing you with practical knowledge because working in a large corporation with practical experience is very different from what you learn. We also provide you with hands-on experience in how things work in the real world.

  3. Equated Monthly Installments (EMIs) are payments made as part of the loan repayment process. An EMI is made up of two parts: principal and interest. The principal amount is subtracted from the lot of amount. The lender is charged interest as part of the loan's expense. This interest is paid on either the total amount of all EMIs or the reduced or outstanding amount. This interest is charged either on the total amount of all EMIs or on the reduced or unpaid principal balance.-

  4. Flat Rate Method: The flat rate method charges interest on the entire debt amount, regardless of how much principal has already been paid back.Assume a person obtains a loan of INR 4 lakhs with a 12-percent interest rate and a two-year repayment period in order to purchase a car. Rohan will always pay the interest on the total loan amount of INR 4 lakhs under the flat rate system.

  5. Reducing Balance Interest Method:Under the reducing balance interest method, interest is frequently charged on the remaining or outstanding balance of the loan sum after a certain amount of principal has been repaid per month. The EMIs remain the same in this case, but the interest portion of the EMI decreases each month. The formula for calculating EMI using the reducing balance method is as follows:[P x R x (1+R)N] = [P x R x (1+R)N] = [P x R = E.M.I. [(1+R)N-1] /[(1+R)N-1] [(1+R)N-1] /[(1+R)N-1] [(1+R)N-1] /[(1+R)N-1] /P stands for the principal loan amount, R stands for the monthly interest rate, and N stands for the loan term in months.So, in the preceding example, the equation will be:EMI = [200000 x 12/(100 * 12) x (1.01)24] EMI = [200000 x 12/(100 * 12) x (1.01)24] EMI = [200000 x 12 [1.01)24-1] [1.01)24-1] [1.01)24-1] [1.01)24-1] [1.01)24-1= 1.2697 x 2000 / 0.2697= 9415.65

  6. It should be noted that the EMIs for the reducing balance method are typically lower than those for the flat rate interest method. The interest component of the reducing balance approach will also decrease month after month, saving you money on the loan. Loan for private use The reducing balance method is common in EMI calculators, whereas the flat rate interest method is common in car loan EMI calculators.And you can conveniently calculate EMIs at any time because we have a free calculator on our website.

More Related