1. What is the EMI Formula?

The EMI (Equated Monthly Installment) formula calculates the fixed monthly payment amount for a loan, consisting of both principal and interest components. It's widely used by financial institutions like BDO for loan repayment calculations.

2. How Does the Calculator Work?

The calculator uses the EMI formula:

Where:

• \( P \) — Principal loan amount (PHP)
• \( R \) — Monthly interest rate (annual rate ÷ 12 ÷ 100)
• \( N \) — Number of monthly installments
• \( EMI \) — Equated Monthly Installment (PHP)

Explanation: The formula calculates the fixed monthly payment that pays off the loan principal and interest over the specified term.

3. Importance of EMI Calculation

Details: Accurate EMI calculation helps borrowers understand their repayment obligations, plan their finances, and compare different loan offers from financial institutions like BDO.

4. Using the Calculator

Tips: Enter the principal amount in PHP, annual interest rate as a percentage, and loan term in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What does EMI include?
A: EMI includes both the principal repayment and interest components for each monthly installment.

Q2: How is the interest rate converted for calculation?
A: The annual interest rate is divided by 12 to get the monthly rate and then divided by 100 to convert from percentage to decimal.

Q3: Can I calculate EMI for different loan terms?
A: Yes, simply change the number of months in the loan term field to see how it affects your monthly payment.

Q4: Does this calculator include any additional fees?
A: This calculator provides the basic EMI calculation. Actual loan payments may include additional fees or charges imposed by the bank.

Q5: How accurate is this EMI calculation?
A: This calculator provides a standard EMI calculation that matches the formula used by most financial institutions, including BDO.