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Equated Monthly Instalment, total interest and total repayment on a reducing-balance loan.
EMI = P·r·(1+r)^n / ((1+r)^n − 1)
EMI stands for Equated Monthly Instalment — the fixed amount you pay the lender every month until the loan is cleared. Each payment is the same size, but its split changes: early payments are mostly interest, later ones mostly principal.
P is the loan amount, r is the monthly interest rate (the annual rate divided by 12 and by 100 to make it a decimal), and n is the number of monthly payments. The formula spreads the principal plus all the interest evenly across n months.
Interest is charged on the balance still owing, and at the start almost the whole loan is outstanding. On a long tenure the interest stacks up — which is exactly what the donut chart makes visible at a glance.
The full ring is everything you will hand over across the life of the loan. One slice is the original amount you borrowed (the principal); the other slice is the interest the lender keeps. The bigger the interest slice, the more the loan costs you beyond what you borrowed.
Home loans — a $400,000 mortgage at 6% over 30 years has an EMI near $2,398. Car loans — $30,000 at 8% over 5 years is about $608 a month. Personal loans use the same maths. Comparing the total-interest slice across offers shows which loan is genuinely cheaper, not just which has the smaller monthly payment.