Hai dear Members of CAclubindia,
Here is my small doubt regarding How banks will calculate and fix EMI payable during the loan period.
My question is, can anyone explain me(preferably with an example) how to caculate the same amount of installment payable every month on a loan by the borrower????? i.e., like Rs.5455/- payable per installment.
Please clarify my doubt at an earliest.
With Regards,
Kumar.
Dear
it is so simple ,just divide the principal by the discount factor & u get the installment amount,let u had taken a loan on 5000 for 10 years @ 10%pa
HERE IS UR CALCULATION
IN CASE OF MONTHLY INSTALLMENT JUST DIVIDE THE INTEREST RATE BY 12,TO CALCULATE THE INTEREST P.M. & NOW MULTIPLY THE 12 WITH THE NO.OF YEARS. HERE CHANGE IN CALCULATION BE THAT THE CALCULATION WE HAD MADE FOR 10 YEARS BE CONVERTED TO 120 MONTH & RATE OF INTEREST IS DOWN TO 10%/12
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