Question 1

What is EMI?

Accepted Answer

EMI stands for Equated Monthly Installment. It is a fixed amount of money that a borrower pays to a lender at a specific date each month.

Question 2

How is EMI calculated?

Accepted Answer

EMI is calculated using the formula: EMI = [P x R x (1+R)^N]/[(1+R)^N-1], where P is principal, R is interest rate per month, and N is the number of monthly installments.

Question 3

Does EMI change if RBI changes interest rates?

Accepted Answer

For floating rate loans, the EMI or the tenure may change if the RBI repo rate changes. For fixed rate loans, it remains the same.

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