Car Loan EMI Calculator

Formula

The formula to calculate the monthly EMI is:

\[ \text{EMI} = \frac{P \times R \times (1 + R)^N}{(1 + R)^N - 1} \]

Where:

$ \text{EMI} $ is the Equated Monthly Installment ($/month).
$ P $ is the principal loan amount ($).
$ R $ is the monthly interest rate (%).
$ N $ is the number of monthly installments.

What is EMI?

EMI (Equated Monthly Installment) is the fixed monthly payment you make to repay a loan over a specified period. It includes both the principal and interest components of the loan. This calculation is crucial for budgeting and planning your finances when taking out a car loan.

Example Calculation

Let's consider an example:

Loan Amount (P): $20,000
Annual Interest Rate (R): 6%
Loan Term (T): 5 years

Using the formula to calculate the monthly EMI:

\[ \text{EMI} = \frac{20,000 \times \frac{6}{12 \times 100} \times (1 + \frac{6}{12 \times 100})^{60}}{(1 + \frac{6}{12 \times 100})^{60} - 1} \approx 386.66 \text{ dollars per month} \]

This means that the monthly EMI for this car loan is approximately $386.66 per month.