EMI on Excel spreadsheet
It is much easier these days to use Excel spreadsheet than search for calculators, formulae and tables for calculating EMI.
The function in Excel for calculating EMI is not EMI but PMT. It requires minimum three arguments. They are 1. Rate of interest (Rate), 2. Number of periods (Nper) and 3. Value of loan or present value (Pv) in that order, that is, PMT (Rate, Nper, Pv)
If you want to find EMI for 1 lakh at 10% annual interest for 10 years you enter the following in one of the cells:
= pmt(10%/12, 10*12, 100000)
Avoid unnecessary spaces particularly between `pmt' and `('. Answer will be in the negative or in red colour indicating cash outflow for the borrower.
Taking another example, Equated Quarterly Instalments for 1 lakh at 7.5% annual interest for 20 years you enter the following in one of the cells:
= pmt( 7.5%/4, 20*4, 100000)
The `Goal Seek' option in `Tools' menu helps you to back work any of the three given the other two. Alternatively, there are other financial formulae like `PV', `Rate' to calculate the eligible loan, corresponding rate of interest and so on.
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