 Calculating your Equated Monthly Installment (EMI) is very easy to do in Excel. There are numerous online calculators that provide the same functionality. However, in our world, we prefer 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

Excel makes it much easier to calculate EMI by using the PMT Function. Plus, you do not need to pull out your TI-83 calculator. (I had a TI-89 and still do).

`=PMT (rate, nper, pv, [fv], [type])  `
• Rate:     Interest Rate per period
• Nper:    The number of periods
• Pv:         Present value of loan/investment
• Fv:         Future value of the loan/investment – This is optional. If left blank, it will default to zero.
• Type:     Defines if the payment is made at the start or end of the period. If left blank, defaults to zero.

0 – Payment is made at the end of the period
1 – Payment is made at the beginning of the period

Let’s look at the following example. Saw were are purchasing a car and need to borrow \$15,500 over 3 years at 6.5% annual interest rate. Our EMI would be \$475.06 per Month or \$5,700.71 year.