Q.Find the EMI for a personal loan of ₹1,50,000, taken at 12% per annum, to be repaid over 6 monthly instalments.

Apply the EMI formula directly after converting the annual rate to a monthly rate.

$(1.01)^6=1.061520$.

$\text{EMI}=\dfrac{1{,}50{,}000\times0.01\times1.061520}{0.061520}\approx25{,}882.26$

Here $P=₹1{,}50{,}000$, annual rate $12\%$ so monthly rate $r=0.01$, tenure $n=6$ months.

Step 1 — Compute $(1+r)^n$. $(1.01)^6 = 1.061520$.

Step 2 — Apply the EMI formula.

Rounding $(1.01)^6$ too early (say, to just 2 decimal places, $1.06$) before dividing introduces a visible error into the final EMI — carry at least 5–6 decimal places through $(1+r)^n$ before completing the division.