✅What is an EMI?
Imagine you borrow toy money from a friend to buy a big toy. You can't pay it all back at once, so you give them a little bit of money every month until it's all paid back. That monthly payment is called an EMI (Equated Monthly Installment)!
✅How do we count it?
We use a simple magic rule to figure out how much you need to pay each month. It looks at:
👉 P (Principal): How much money you borrowed.
👉 R (Interest Rate): A little extra fee for borrowing the money.
👉 N (Time): How many months you will take to pay it back.
This helps you plan so you know exactly how much to save every month!
✅The Formula
EMI = [P x R x (1+R)^N]/[(1+R)^ (N-1)]
Don't worry if it looks scary! It just means we take the money you borrowed, add the fee, and divide it by the number of months.
