Friday, February 13, 2009

True [Inflation Linked] cost of ClubMahindra Vacation

Idea behind this calculation is to compute per day cost for a member, that also move up according to inflation giving you true cost of your accommodation.

Main point in this calculation..

*) Assume if you have put your membership cost in a Holiday Account which earn interest, also you withdraw money at yearly interval from this account for your accommodation expenses.  During 25 years of membership you spend all your money and interest and do not receive any money at the end of 25 years.  [ See yellow cells]

*) Inflation is assumed at 7% and interest rate on your money at [inflation rate + 2% =] 9%. If you create similar table with inflation rate at 6% and interest rate at 8% or as long as rate difference is 2%, per day cost will come almost same (margin of error will be negligible).

*) It is calculated in a way that your withdrawal amount from this account is increasing with same rate as inflation (7%), as your ASF. As result last column  (per day cost) is increasing at rate as inflation or ASF. Also at the end of 25th year all your money is spent.

*) Promotional item cost is reduced from the membership cost. (cost may vary with time/membership type so proportionately adjust per night cost)

*) ASF is assumed to be increasing at rate 7% in line with our assumed inflation for simplicity, it may increase more or less as may be decided by the Mahindra Holidays time to time.

You may like to do your calculation here ::

Related post:

Before considering Club Mahindra Membership : My personal advice
What are you paying for your Timeshare Membership?
Club Mahindra at its best: from 50 to 70 consumer cases in 10 months