ilmscore | Investing vs Loan Repayment | 2022 | CA Rachana Ranade

Investing vs Loan Repayment | 2022 | CA Rachana Ranade

Published: 2022-09-28
Status: Available | Analyzed

Predictions from this Video

Total: 5
Correct: 0
Incorrect: 0
Pending: 5
Unrated: 0
Prediction
Topic
Status
Index funds can generate average annual returns between 13-14% over a 10-year period, but returns can vary, especially for shorter tenures like five years, and could be lower than 14%.
"on an average your index funds generate somewhere between 13 to 14% returns but wait this is the 10 years criteria that I am looking at. Could the returns vary? Yes so even though I am taking 14% rate of interest here word of question this could be lower than 14% as well if you are talking about only a five years tenure."
Index Funds and Equity Returns
Pending
With a 50 lakh rupee home loan at 7.5% interest over 20 years, the total repayment would be approximately 96.67 lakhs, with 46.67 lakhs being interest.
"assuming that the rate of interest on home loan is 7.5 percent, you will be paying 96 so you will be repaying 96.67 lakhs and I am sure it might be like what for a 50 lakhs loan you are going to repay 96.67 lakhs from, from where did I get this calculation? It is a simple Excel calculation you have to use the EMI formula"
Home Loan Interest Rates
Pending
Home loan interest rates could be revised upwards, for example, from 7.5% to 8.5% due to policy decisions.
"because of some RBI policy decisions is that your bank has decided that now the revised home loan rate of interest is going to be 8.5 percent instead of 7.5 percent right"
Home Loan Interest Rates
Pending
Numerically, investing surplus funds in equities or mutual funds is a better option than knocking off loans, leading to potential gains of 41.81 lakhs compared to 19.62 lakhs in a loan repayment scenario.
"as per option number one how much gain you would have made that was 19,62,000 and as per option number two you would have gained 41, 81,000. So numerically knocking of the loan was not a good option but investing the surplus in Equities or in Mutual funds was a better option"
Investment Returns vs. Loan Repayment
Pending
Equity market and mutual fund returns are subject to market risks, and actual returns may differ from calculated projections.
"but of course a word of question Equity market returns and Mutual fund returns are subject to market risks the actual returns can very well vary from your mathematical calculations."
Investment in Equities/Mutual Funds
Pending