Post on 28-Dec-2015
1INFLATION PROTECTION--------------------------------------
authorB N VENKATARAMAN
2INFLATION AND RETURN----------------------------------------
There is inflation consistently over the period of years and since 2010
it is of the order of10%
Whereas if one has capital amount in bank FD or LIC pension one gets return
fixed percentage say 9.25%or
With tax exemption 10(10)D some 8%
31980s and before----------------------------------------------
IN CASE OF LOAN REPAYMENT TO BANK
WE HAD DIMINISHING BALANCE
METHODWHEREIN THE BORROWER HAS TO REPAY EQUAL INSTALMENT OF PRINCIPAL PLUS INTEREST ON DIMINISHING RUN BALANCE
IN A TYPICAL CASE FOR 20 YRS SCHEME WITH RATE OF 10% interest ONE PAYS
RS.15000 IN FIRST YEAR 14500 IN SECOND YEAR AND SO ON AND AT 20TH YEAR PAYS RS.5500 ON
RS. 1 LAC LOAN
4Since 1994 we have EMI----------------------------------------------
IN CASE OF LOAN REPAYMENTTO BANKWE HAD
EQUATED MONTHLY INSTALMENTMETHOD
WHEREIN THE BORROWER HAS TO REPAY EQUAL INSTALMENT OF COMBINED (PRINCIPAL REPAYMENT PLUS INTEREST).
IN A TYPICAL CASE FOR 20 YRS SCHEME WITH RATE OF 10% interest ONE PAYS
RS.11745 EVERY YEAR on a loan of Rs.1 LAC
5INFLAPRO----------------------------------------------
IN CASE OF LOAN REPAYMENT TO BANK
BNV PROPOSES
I N F L A P R O (inflation protected say @ 10%inflation) METHODWHEREIN THE BORROWER HAS TO REPAY EQUAL INSTALMENT
less amount than in EMI in the first year and repays 10% over Previous year repayment in next year and so on
Until the end of term.
IN A TYPICAL CASE FOR 20 YRS SCHEME WITH RATE OF 10% interest ONE PAYS
RS.5500 IN FIRST YEAR 6050 IN SECOND YEAR AND SO ON AND AT 20TH YEAR PAYS RS.33637
ON RS. 1 LAC LOAN
6Graph Diminishing BalanceRepayment Vs Year
-----------------------------------------Rupees
Years
7TYPICAL Graph (EMI)Repayment Vs Year
-----------------------------------------
8Typical Graph (INFLAPRO)Repayment Vs Year
-----------------------------------------
9graph (dimn.bal), EMI & inflapro----------------------------------------------
10PURCHASING CAPACITY(DIMN.BALANCE)
-------------------------------------------
WITH THE RETURN OF RS 15000IN FIRST YEAR
The purchasing cap. Is approx 15000and
In 20th year with return of 5500the purchasing cap is only Rs. 900
of current price
11PURCHASING CAPACITY(EMI)
-------------------------------------------
WITH THE RETURN OF RS 11745IN FIRST YEAR
The purchasing cap. Is approx 11745and
In 20th year with return of 11745the purchasing cap is only Rs. 1920
of current price
12PURCHASING CAPACITY(INFLAPRO)
--------------------------------------------WITH THE RETURN OF RS 5500
IN FIRST YEARThe purchasing cap. Is approx 5500
and In 20th year with return of 33637
the purchasing cap is only Rs. 5500of current price.
The Purchasing capacity never diminishes during the term
13
Typical chart of inflapro------------------------------------------------------------------------
14BNV's WEB SITE-------------------------------------
THERE ARE TWO WEB SITE www.bnv.bvraghav.com
Dealing inflapro in detail of one optionFor a given set of parameters
and www.bnvenkat.com Giving chart of inflapro
With 13 options for a given set of parameters
16CONTACT US-------------------------------------
Shri. B N Venkataraman
D 1/233 sector F, Jankipuram
Lucknow (India) 226 021
Phone: 0522-4072761
Mobile: 7388270901