What is an EMI and how is it calcualated?

 EMI stands for "equated monthly installment." An EMI is the fixed amount that a borrower pays to a lender each month to repay a loan, which typically includes both the principal and interest on the loan.

EMI is calculated using the following formula: E = P * r * (1+r)^n / ((1+r)^n-1)

Where:

• E is the EMI
• P is the principal amount of the loan
• r is the annual interest rate on the loan, divided by the number of compounding periods per year
• n is the number of payments (i.e. the number of months over which the loan will be paid off)

For example, if you take a loan of 1,00,000 at an interest rate of 10% per annum for a period of 3 years (36 months). The EMI would be calculated as follows:

E = 100,000 * (10/12 * (1+10/12)^36) / ((1+10/12)^36-1) = 30,780

So, the EMI to be paid for a loan of 1,00,000 at 10% per annum for 3 years would be 30,780 per month.

This calculation assumes a fixed interest rate, which is the common type of interest rate offered by most of the banks and financial institutions. However, depending on the lender and loan type, interest rates may be variable and subject to change over the loan period.