BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Equal Monthly plan
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Equated Monthly Instalments
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Equal payment option
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Equated money installments
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Detailed explanation-1: -An equated monthly installment (EMI) is a fixed payment amount made by a borrower to a lender at a specified date each calendar month. Equated monthly installments are applied to both interest and principal each month so that over a specified number of years, the loan is paid off in full.
Detailed explanation-2: -What does EMI mean? EMI stands for equated monthly instalment. It relates to payments made regularly to repay an outstanding loan within a certain time frame. As the name implies, these instalments are always of the same amount.
Detailed explanation-3: -Because every monthly payment is equal, these payments are called “equated monthly installments.” You agree to make those payments until the loan is paid in full. An equated monthly installment (EMI) includes principal, interest, and sometimes, fees rolled into the loan by the lender.
Detailed explanation-4: -EMI Calculation Methods Calculating EMI has a Simple Formula, Which is As Follows: EMI = (P X R/12) X [(1+R/12) N] / [(1+R/12) N-1]. Here, P is the original loan amount or principal, R is the rate of interest that is applicable per annum and N is the number of monthly installments/ loan tenure.