Formula:
The Standardized Payment Term, commonly known as Equated Monthly Installment (EMI), is calculated using the following formula:
EMI = P × i × (1 + i)N ÷ ((1 + i)N - 1)
- P: Principal Loan Amount (in INR)
- i: Monthly Interest Rate (Annual Rate / 100 / 12)
- N: Total Number of Monthly Payment Terms
This formula helps you understand the uniform payment required each month to repay a loan over a specified period at a given interest rate.