Control in Loan Transactions : adjusting the payments to the real inflation rates

• Autorzy: Salvador Cruz Rambaud , José González-Sánchez
• Języki publikacji: EN

Abstrakty

EN

This paper explores the effect of inflation on general financial transactions and particularly on loans. For this purpose, inflation is specified in the mathematical expression of a capitalization or discounting function. Thus, we write these functions as the product of an inflation-free capitalization or discounting function and the law of variation of the money purchasing power. As an immediate consequence, we show that the instantaneous rate of a capitalization or discounting function is the sum of the instantaneous rates of each component. Later, this decomposition is applied to simple and compound financial transactions, leading to the equivalence among deflated amounts by means of an inflation-free capitalization or discounting function. This analysis is applied to a loan transaction where we introduce six methods to adjust the payments to the real inflation, because, in a beginning, these payments were calculated with the predicted inflation rates. (original abstract)

Słowa kluczowe

EN

Loans; Inflation; Interest rate; Financial mathematics

PL

Pożyczki; Inflacja; Stopa procentowa; Matematyka finansowa

• Czasopismo: Control and Cybernetics
• Rocznik: 2013
• Tom: 42
• Numer: nr 4
• Strony: 829--853

Twórcy

autor

Salvador Cruz Rambaud

• University of Almeria, Spain

autor

José González-Sánchez

• University of Almeria, Spain

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