Calculating EMI values for your own dream car

Calculating EMI values for your own dream car

If you have always dreamt of owning your own car but wondered how much you will pay monthly for it, this short article will tell all you need to know about EMI. If you try to redo the following example about EMI for used Fiat Punto in Bangalore you might get even a clearer picture.

EMI means the equated monthly installments. It’s a financial plan that works similar to home loan or any personal loan. To pay it you should pay the installments each month and clear off your debt during a prearranged period of time, agreed by the lender.

It’s calculated using the mathematical formula Where P stands for principle loan value and R is the interest rate for a month and N is the number of monthly installments. If this looks a little too complex for you thenthere are apps that calculates EMI.

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Say you took a loan of ten lacks from a bank to buy your Fiat Punto at interest rate of 10.5%, for 60 months. Then when we work out the above formula we will get 6746.5 INR.

  • A wise choice before going for any payment plan.

You might think that you could afford a bigger sum of money at the present but there will be risks involved in your life. It can be a job loss or a sudden sickness of a family member, in such a situation having a big sum to pay will not only give you stress but will also cost you your dream car.

In order to stay safe go to a lower amount. So say you are able to pay three quarter from your salary for the loan then apply for installments that takes only half.

So that’s it memorize EMI definition, work out the sum and take the advice.

 

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