Prepay the loan or invest?

Every month the same total leaves your account in both strategies: the original EMI plus your extra amount. Prepay sends the extra to the loan. Invest sends it to the investment and keeps the loan on its original schedule.

When prepaying closes the loan early, the EMI (and extra) it no longer needs goes into the investment for the remaining months. That is why the Prepay column also shows investments: they are built only from cash the loan stopped taking. Without this step the two strategies would not be cash-flow equivalent.

Loan interest accrues monthly at rate ÷ 12. The investment return is an effective annual rate, converted to a monthly rate as (1 + R)^(1/12) − 1. Monthly flows happen at month end. A lump sum lands at the start of the month you choose.

If you override the EMI, the loan follows that EMI. One above the calculated EMI closes the loan early, which is how an OD account behaves. The comparison still ends at the remaining tenure and deducts any balance still owed.

Net worth is investments minus the loan still outstanding. Because both strategies are compared at the same date in the same nominal rupees, inflation does not change which one wins.

With a fixed rate and no tax effects, prepaying is equivalent to earning the loan's effective annual rate, (1 + r/12)^12 − 1, without risk. That is why it is the break-even return.