Emi Calculation Formula With Example In Excel 2 easy and useful ways to make an EMI formula in Excel with example Download our practice book modify data and exercise Free Excel Courses Create Basic Excel Pivot Tables Method 1 Using a Manual Formula to Calculate EMI in Excel In our first method we ll apply a manual formula using the basic mathematical equation to find EMI
Things to Remember Understanding EMI Equated Monthly Installment or EMI for short is a set monthly payment made by a borrower to a lender on a particular date EMIs are frequently used to pay back loans including personal auto and home loans Input Data You must collect the required input data before you can calculate the EMI in Excel The sum of the loan the interest rate and the EMI Calculation Formula with Example After learning about each variable let s get a clear idea of how this calculator works Suppose you have availed a loan of Rs 10 lakh to build a house The lending institution has offered a loan with an annual interest rate of 7 2 for a tenure of 10 years
Emi Calculation Formula With Example In Excel
Emi Calculation Formula With Example In Excel
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Why use Excel to calculate EMI Excel s PMT function simplifies EMI calculations making it easy to adjust variables and see different scenarios What if my interest rate changes You can update the interest rate cell and the EMI will automatically recalculate Can I use Excel for other financial calculations Absolutely Calculate Number of Payments In another cell calculate the total number of payments n by multiplying the loan tenure in years by 12 For example in cell B5 Formula B3 12 Label cell A5 as Number of Payments EMI Calculation Use the PMT function in Excel to calculate the EMI In a new cell enter the following formula
Total cost is EMI years months The formula is E9 E6 E5 in my example Total interest is just total cost loan amount E11 E5 Total cost of such loaned would be over 3 77m and total interest over 2 27m How to calculate loan amount based on given EMI This is how to calculate EMI with Excel Equated Monthly Installment EMI Math Formula Mathematically the formula for EMI is below Definitely brings back order of operations EMI P x R x 1 R N 1 R N 1 E EMI P Principal Loan Amount r Rate of interest calculated on monthly basis n Loan term in Years Months Divide by 12 for Months Calculate EMI in Excel
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How to calculate EMI Layout the information you already know without EMI calculation Click on the column that is beside the monthly installment and type in PMT rate nper pv type PMT E8 E7 E7 E6 E5 is the formula here Note The rate is interest divided by the payment per year nper is loan terms multiplied by the count of payments This approach makes it easy to adjust the numbers and immediately see how your EMI changes without rewriting the formula each time Breaking Down the EMI Formula For those who like to know what s under the hood let s look at the math behind the PMT function The formula to calculate EMI is EMI P x r x 1 r n 1 r n 1 Where
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Emi Calculation Formula With Example In Excel - Why use Excel to calculate EMI Excel s PMT function simplifies EMI calculations making it easy to adjust variables and see different scenarios What if my interest rate changes You can update the interest rate cell and the EMI will automatically recalculate Can I use Excel for other financial calculations Absolutely