Our Methodology

Last updated: September 2026

This page documents every formula used across AllEmiCalculator's tools, along with the assumptions behind each one. We built this page for transparency — so you can verify our math, understand the limits of each calculator, and know exactly what a result does and doesn't account for.

General Assumptions

• All loan calculators assume the reducing balance method (interest charged only on the outstanding principal each period), which is the standard for virtually all EMI-based loans in India.
• Unless stated otherwise, currency figures are in Indian Rupees (₹), and interest rates are annual (per annum) unless labeled monthly or quarterly.
• No calculator on this site includes lender-specific processing fees, prepayment penalties, insurance premiums, or GST on charges, unless explicitly mentioned in that tool's content section — always confirm final costs with your specific lender.
• Tax and statutory figures (slabs, exemption limits, PPF/NPS rules) reflect rules confirmed as of September 2026 and are subject to change by future government notifications.

1. Loans & EMI Calculations

EMI (Equated Monthly Installment)

Used by the EMI, Home Loan, Car Loan, Personal Loan, Education Loan, and Credit Card EMI calculators:

E = P × r × (1 + r)^n / ((1 + r)^n − 1)

Where P is the principal, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the tenure in months. The amortization schedule is generated by iterating month by month: each period's interest is the outstanding balance × r, and the remainder of the EMI reduces the principal.

Total Interest

Total Interest = (EMI × Tenure in Months) − Principal

Used directly by the Total Interest Calculator, and as a derived figure on every EMI-based tool.

Implied Interest Rate

The Interest Rate Calculator solves for r given a known principal, EMI, and tenure. Because the EMI formula can't be algebraically rearranged to isolate r, we use a binary search: repeatedly testing candidate rates and narrowing the range until the computed EMI matches your input to within a fraction of a rupee.

Loan Tenure

N = log(E / (E − P × r)) / log(1 + r)

Used by the Loan Tenure Calculator to solve for the number of months (N) needed to repay a loan at a fixed EMI.

Loan Eligibility (FOIR)

The Loan Eligibility Calculator applies a standard Fixed Obligation to Income Ratio (FOIR) of 50%: your total monthly debt obligations (including any new EMI) should not exceed 50% of your net monthly income. The affordable EMI is then converted to a maximum loan principal using the inverse EMI formula. Real bank FOIR limits vary (typically 40-55%) by lender and income bracket.

Down Payment (Target-Based)

The Down Payment Calculator works backward from a target EMI to find the maximum loan principal that EMI supports, then subtracts that from the property value to find the required down payment.

Loan Prepayment / Part-Payment Impact

The Prepayment Calculator simulates the loan month-by-month up to your specified prepayment month, deducts the lump sum from the outstanding balance, then continues the amortization either at the same EMI (Reduce Tenure) or with a newly-calculated lower EMI over the remaining original tenure (Reduce EMI). It compares total interest paid in both scenarios against the original, unmodified schedule.

2. Savings & Investments

Simple Interest

SI = (P × R × T) / 100

Used by the Simple Interest Calculator. Interest is calculated only on the original principal P, at annual rate R%, over T years — it does not compound.

Compound Interest

A = P(1 + r/n)^(n×t)

Used by the Compound Interest and Fixed Deposit calculators, where n is the compounding frequency per year (e.g., 4 for quarterly, the standard for Indian bank FDs) and t is the tenure in years.

Recurring Deposit (RD)

M = R × [((1 + i)^n − 1) / (1 − (1 + i)^(−1/3))], where i = annual rate / 400, n = months / 3

Used by the RD Calculator. This is the standard formula published by Indian banks for RD maturity value, reflecting quarterly compounding applied to a stream of monthly deposits.

SIP (Systematic Investment Plan)

M = P × [((1 + i)^n − 1) / i] × (1 + i)

Used by the SIP Calculator and, in reverse (solving for the required monthly SIP), by the Retirement Corpus Calculator. This is the future value of a growing annuity due (deposits made at the start of each month), where i is the expected monthly return.

CAGR (Compound Annual Growth Rate)

CAGR = (Final Value / Initial Value)^(1/Years) − 1

Used by the CAGR Calculator to annualize the return of a lumpsum investment between two points in time.

PPF (Public Provident Fund)

The PPF Calculator assumes a single deposit at the start of each financial year (the convention for maximum annual interest) and compounds annually at the government-notified rate: Balance(year N) = (Balance(year N−1) + Yearly Deposit) × (1 + rate).

3. Tax & Retirement Planning

Income Tax (Old vs New Regime)

The Income Tax Calculator applies India's slab-based tax structure: each portion of taxable income falling within a slab is taxed at that slab's rate, summed across all slabs, then a Section 87A rebate is applied in full (zeroing the tax) if taxable income is within the rebate threshold for the selected regime. A 4% Health & Education Cess is added on the resulting tax. Old Regime slabs vary by age category (below 60 / 60-80 / 80+); New Regime slabs are age-independent.

HRA Exemption

The HRA Exemption Calculator computes the exemption as the lowest of three figures under Section 10(13A): (1) actual HRA received, (2) rent paid minus 10% of Basic+DA, and (3) 50% of Basic+DA for metro cities or 40% for non-metro cities.

Gratuity

Gratuity = (Last Drawn Salary × 15 × Years of Service) / 26

Used by the Gratuity Calculator for employees covered under the Payment of Gratuity Act, 1972 (divisor 30 and no 6-month rounding for employees not covered). A period of 6 months or more in the final year of service is rounded up to a full year.

NPS (National Pension System)

The NPS Calculator projects the retirement corpus using the same growing-annuity SIP formula above, then splits the corpus into a lumpsum withdrawal and an annuity portion (percentage set by you) to estimate a monthly pension based on an assumed annuity rate.

Retirement Corpus

The Retirement Corpus Calculator inflates your current monthly expenses to your retirement date, then computes the corpus required using a real rate of return annuity formula — discounting a growing stream of inflation-adjusted withdrawals (during retirement) back to a single required amount at retirement, using realReturn = (1 + post-retirement return) / (1 + inflation) − 1.

4. Property & Other Tools

Stamp Duty & Registration

The Stamp Duty Calculator applies state-specific stamp duty and registration percentages (with gender-based concessions and registration fee caps where applicable) to the property value. Rates are indicative and compiled from public sources — always verify with your state's IGR/Stamps & Registration department.

Rent vs Buy

The Rent vs Buy Calculator compares two simulated cash-flow paths over your holding period: buying (down payment + EMIs + maintenance, minus resulting home equity) versus renting (rent paid, minus investment gains from investing the down payment and any EMI-rent surplus). The lower net cost is the more financially advantageous option under your inputs.

Net Worth

Net Worth = Total Assets − Total Liabilities

Used by the Net Worth Calculator, summing user-entered asset and liability categories.

Debt-to-Income Ratio (FOIR)

DTI = (Total Monthly Debt Payments / Gross Monthly Income) × 100

Used by the DTI Calculator to gauge how much of your income is already committed to debt.

GST

The GST Calculator either adds GST to a base price (Base × Rate ÷ 100) or extracts it from a GST-inclusive price (Total − [Total × 100 ÷ (100 + Rate)]), and splits the resulting tax evenly into CGST and SGST for intra-state transactions.

Salary (Gross to Net)

The Salary Calculator subtracts a user-provided effective tax rate and other deductions from gross annual salary, then divides by 12. For an exact effective tax rate, first use the Income Tax Calculator.

Currency Converter

The Currency Converter uses periodically-updated approximate exchange rates (not a live market feed) for estimation purposes only.

Questions About Our Math?

If you believe a calculation is incorrect, or you'd like to see the source for a specific rate or rule, please contact us. We verify every formula against authoritative sources (RBI, Income Tax Department, PFRDA, IBA, and relevant Acts) and welcome corrections.