EMI stands for Equated Monthly Installment. It is a fixed amount paid by a borrower to a lender at a specified date each month. EMIs are applied to both interest and principal each month so that over a specified number of years, the loan is paid off in full.

The mathematical formula for calculating EMI is: $E = P \times r \times \frac{(1+r)^n}{(1+r)^n - 1}$, where $E$ is EMI, $P$ is Principal Loan Amount, $r$ is monthly interest rate, and $n$ is loan duration in months.