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[How-To] Calculate Equated Monthly Installment using MS Excel

Saturday, 29 March 2008, 14:06 | How-To, Microsoft Excel, Technology, Tools, Tricks, Tutorials | 7 Comments | Read 3620 Times
by Vaibhav Pandey

Excel is definitely a very powerful tool and i attribute the reason for its success to the fact that it was able to change the way people used to compute earlier. The fact that Excel was able to change the behavior of people is the real reason for its success. Therefore, it also holds a very key lesson, if we can create softwares which in turn lead to change the way people live/ work/ behave, those softwares shall certainly be big hits :)

In this post, i shall share with you the formula available in Excel to calculate Equated Monthly Installment.

Lets assume we need to calculate Equated Monthly Installment (EMI) for a principal of 1,00,000 for a period of 1 year (12 months) at a rate of 11%. In order to compute Monthly Installment using Microsoft Excel, follow the below mentioned steps.

1.) Go to Fx and select PMT from Financial.

Using PMT to compute EMI

2.) Enter Rate of Interest. Mention it as 0.11/12 [ 11% divided by 12]

PMT nper

3.) Enter value for “Nper” as 12 for our case of 1 year. [ number of years multiplied by 12]

4.) Enter 100000 as the value for Principal in the field called Pv.

5.) Press Ok to get the result as 8838.17.

Also read:

How-To: Create Basic Charts using Microsoft Excel

MS Office Fun: Excel Games

How-To: Copy Excel cells into a Word document
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Vaibhav



Follow me on Twitter at @vaibhav1981
  • http://www.nithyadayal.com/blog/ Nithya Dayal

    An interesting and useful post. XL definitely changed the way people managed numbers and calculations.

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  • JAGDISH B SHAH

    Please send me a chart giving detail bifurcation of Principal & interest components from EMI paid every month with variable can be changed as per requirement. i.e. floating rate of interest

    Thanks & regards

  • linkinrustle

    Somebody Help me in solving this:
    Mr A Adhikari has taken a loan of Rs 400 000 which he proposes to pay off over a period of 12 years by equated monthly installments (EMI).
    He expects significant improvement in his financial position at the expiry of first 5 years so that he is able to increase his EMI-contribution for the remaining 7 years at 30% more than his previous pay off amount.
    The rate of interest on the loan being 8%.
    How to solve this? Both mathematically and using excel?

    Please help.

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