Business Mathematics and Basic Statistics · Class 12 Commerce
Ch 12Financial Loans and EMI — Class 12 Business Mathematics and Basic Statistics, concept-first.
When a person borrows money from a bank — a personal loan, a home loan, or a vehicle loan — the loan is almost never repaid as a single lump sum at the end. Instead, the borrower repays a fixed amount every month, called the Equated Monthly Instalment (EMI), until the entire loan (principal plus interest) is cleared.
Key concepts
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EMI — Meaning and Formula
The Equated Monthly Instalment (EMI) is the fixed monthly amount that fully repays a loan of principal , at monthly rate , over months: .
Most relevant Q&A
Chapter contents
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The Idea of an EMI
When a person borrows money from a bank — a personal loan, a home loan, or a vehicle loan — the loan is almost never repaid as a single lump sum at the end.
The EMI Formula
For a loan of principal , at a monthly interest rate (as a decimal), repaid over equal monthly instalments, the EMI is
Applying the EMI Formula Across Loan Types
A personal loan, a home loan and a vehicle loan are, mathematically, exactly the same calculation — only the numbers differ: a home loan typically involves a much larger principal and a longer tenure…
Finding an Unknown Quantity in the EMI Formula
The EMI formula relates four quantities: , , and . Given any three, the fourth can, in principle, be found by rearranging the formula — but the three quantities are not all equally easy to isolate alg…
Exercises
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- Q6Find the EMI for a personal loan of ₹1,50,000, taken at 12% per annum, to be repaid over 6 monthly instalments.Free
- Q7A home loan of ₹6,00,000 is sanctioned at 12% per annum, to be repaid over 36 monthly instalments. Find the EMI, and the total interest paid…Free
- Q8A borrower pays an EMI of ₹22,920 per month for 12 months on a vehicle loan taken at 18% per annum. Find the loan amount.Preview
- Q9A loan of ₹1,80,000 is taken at 12% per annum, to be repaid over 18 monthly instalments. Find the EMI and the total interest paid over the l…Preview
More questions
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- Example 1Find the EMI for a personal loan of ₹1,20,000, taken at 12% per annum, to be repaid over 12 monthly instalments.Free
- Example 2A home loan of ₹5,00,000 is sanctioned at 12% per annum, to be repaid over 24 monthly instalments. Find the EMI and the total interest paid…Free
- Example 3A vehicle loan of ₹3,00,000 is taken at 18% per annum, to be repaid in 12 monthly instalments. Find the EMI.Preview
- Example 4A borrower pays an EMI of ₹21,116.42 per month for 10 months on a loan taken at 12% per annum. Find the loan amount.Preview
- Example 5A loan of ₹1,00,000 is taken at 12% per annum and repaid through an EMI of ₹8,884.88 per month. Find the tenure of the loan, in months.Preview