What are the factors that affect the Equated Monthly Instalments or EMI of Bank Loans? With the help of the following data, calculate the Equated Monthly Instalment (EMI) of Housing Loan taken by Srinivasan from X bank,

The Three Major Factors that affect the Equated Monthly Instalment (EMI) are Principal of Loan Amount, Rate of Interest and Loan tenure. Principal Loan Amount: The principal loan amount is the original loan amount that the borrower borrows from the lender. This is the main factor that decides the EMI amount. The higher the principal loan amount higher will be the EMI. Rate of Interest: This is the interest rate that is charged on the loan and is also an important factor in deciding the EMI amount. Banks/Financial Institutions calculate the interest based on several factors like your income, repayment capacity, credit history, prevailing market situation, etc. Loan Tenure: It is the period given to the borrower by the Bank within which the entire loan has to be paid off by the borrower to the Bank. Longer tenure implies that the borrower needs to pay interest for a longer period to the lender. EMI is calculated using the formula EMI = [P × R × (1+R)^n] / [(1+R)^n - 1] Principal Loan Amount (P) = ₹50 lakh Rate of Interest (R) = 10% p.a. Loan Tenure (n) = 15 years Hence EMI for X bank Housing loan can be calculated as follows: Interest rate (R) = 10% / 12 months = 0.0083 Loan period (n) = 15 years = 180 months Equated Monthly Instalment (EMI) = (50,00,000 × 0.0083) × (1+0.0083)^180 / [(1+0.0083)^180 - 1] = (41500 × 4.43) / (4.43 - 1) = 183845 / 3.43 = ₹53,599