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Difference between pmt formula and emi formula

Vishaal Patange (Service) (25 Points)

01 November 2016

What is the difference between PMT formula and EMI formula? Or both are same?

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3 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (195533 Points)
Replied 01 November 2016

Actually it may be called same, as PMT is one of the function in EXCEL to calculate the payment for a loan based on constant payments and a constant interest rate, i.e EMI.

The basic formula that works behind an EMI calculator is:

E = P x r x (1+r)^n/((1+r)^n – 1)

for details you may refer https://www.youtube.com/watch?v=WzofplrjidU

Vishaal Patange (Service) (25 Points)
Replied 02 November 2016

Thanks for your reply, Sir, I'm a Banker. When we open loan account there are 2 different options one is on PMT formula and second is on EMI formula, that is why I'm confused. If both are same then why 2 options are there?

I know that in excel we can find EMI with PMT formula.

Thanks again