Worked example
| Item | Value |
|---|---|
| Loan amount (P) | ₹1,00,000 |
| Annual rate | 18% → r = 0.015 a month |
| Tenure (n) | 12 months |
| EMI | ≈ ₹9,168 |
| Total paid | ≈ ₹1,10,016 |
| Total interest | ≈ ₹10,016 |
How tenure changes the cost
A longer tenure lowers the EMI but increases total interest. The same ₹1,00,000 at 18% over 36 months has an EMI of about ₹3,615, but total interest rises to about ₹30,149.
Interest vs principal
Early EMIs are mostly interest; later EMIs are mostly principal. That is why prepaying early saves the most interest.