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