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

15

Please visit www.bnvenkat.comAnd click link

Chart of inflapro

16CONTACT US-------------------------------------

Shri. B N Venkataraman

D 1/233 sector F, Jankipuram

Lucknow (India) 226 021

Phone: 0522-4072761

Mobile: 7388270901