The benefit of an EMI for borrowers is that they know precisely how much money they will need to pay toward their loan each month making the personal budgeting process. The EMI we pay on repayment of a loan or buying any goods is called EMI. EMI P x I x 1IN1IN-1 wherein P loan amount or Principal I Interest rate per month and N the number of installments.
Therefore the EMI reducing-balance method is more.
The standard formula for calculating the EMI due is. EMI P x R x 1RN 1RN-1 Here P is the Principal Loan Amount R is. EMI P x R x 1RN 1RN-1 Where P is the loan amount or principal R is the interest rate per period and N is the number of periodic installments. This is a type of Monthly Installment like if a person takes a loan from a bank on 100000 loan and if the person is unable to give that loan once then EMI is created.