Posted by: Lahure Kancha May 20, 2011
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With interest rate of 13% compounded annually your deposit of 100 would become 113 end of 1 year,
Year 1: 113
Year 2: 127.69
Year 3: 144.2897
Year 4: 163.047
Year 5: 154.24
Year 6: 208.19
Inflation for year 2010 was around 13.2% [http://www.indexmundi.com/nepal/inflation_rate_%28consumer_prices%29.html]
So in reality, your money seems growing but the VALUE remains the same or less(in this case)!! For an example, if now you can buy 1kg of rice for Rs 100, 6 years later it would be Rs 200!! So the 100 now has the same value as 200 after 6 years!!
NRB doesn't guarantee your Savings!!
Property might have doubled in 4-5 Years previously, just look at what happened in US market!! Understand the Bubble, how it forms and how it burst(Also don't forget to consider the INFLATION). Same scenario might happen in Nepal!! I can't predict if it'll happen or not, if yes, then when.....but Devil takes the hindmost (concept of another FOOL will buy when the Price increases)!!
Hope this helps!!
Year 1: 113
Year 2: 127.69
Year 3: 144.2897
Year 4: 163.047
Year 5: 154.24
Year 6: 208.19
Inflation for year 2010 was around 13.2% [http://www.indexmundi.com/nepal/inflation_rate_%28consumer_prices%29.html]
So in reality, your money seems growing but the VALUE remains the same or less(in this case)!! For an example, if now you can buy 1kg of rice for Rs 100, 6 years later it would be Rs 200!! So the 100 now has the same value as 200 after 6 years!!
NRB doesn't guarantee your Savings!!
Property might have doubled in 4-5 Years previously, just look at what happened in US market!! Understand the Bubble, how it forms and how it burst(Also don't forget to consider the INFLATION). Same scenario might happen in Nepal!! I can't predict if it'll happen or not, if yes, then when.....but Devil takes the hindmost (concept of another FOOL will buy when the Price increases)!!
Hope this helps!!