Sameer Soopari - Solutions 1) B) 2) D) 75% compounding)= lakh

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Melvin Edwards
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1 1) B) Sameer Soopari - Solutions 2) D) Total Purchase Price= lakh 75% compounding)= lakh Margin Money= lakh After 6 months sell price= lakh After 6 months loan repayment=(750000*1.01^6)= *1.01^6 Total Gain= ) A) PV= FV= N= 6 months R= % monthly RATE(6,0, ,303860,0) Annual Rate= 47.73% Annual (( %)^(12)-1) Annual Premium= Term= 15 Years SA= 1 lakh Term Premium= 550 Rs Annual Effective Investment= Final Maturity=( (3500*15)= IRR= 2.99% 4) B) 5) B) Single premium= Annual Premium= Term= 20 years Discount rate= 6% for 20 years in begin mode= So Option 2 is suitable PV(6%,20,-12850,0,1)

2 6) A) The effective rate for a three-year block starting from next year is, r = Such three-year block payments are in perpetuity Hence, PV of Rs. 2,00,000 to be received in perptuity every three years starting from next year, i.e. Perpetuity Due 29.50% (1.09)^3-1) *(1+r)/r Vallue of this Perpetuity Due in today's terms, i.e. a year in 9% p.a /(1+0.09) 7) A) Cash in hand with sameer & Urvi= ( ) Their Current Monthly Expense= Annual expense/12= (22500/12)= 1875 Annual Insurance/12=(116375/12)= 9698 Home Loan EMI= Total Months' Reserv=57266*6= Surplus= ) A) On Road Price= Addition due to expenses over Ex Showroom Price= 7.50% So Ex showroom Price /1.075 Loan 75% So Loan Amount= *75% Rate of Interest=11.50% 11.50% per year Term= 3 years EMI= 8,052 PMT(11.5%/12,3*12, ,0,) Total Repeyment=(8052*36)= Original Loan= Total Interest Paid= ) A) KVP doubles in 8 years & 7 months= 103 months Last investment upto the maturity of 1st investment, so total investments= 102 So effectively Sameer will get 92 maturities of Rs every month and invest the monthly interest at begin of every month So value of balanced fund at the time of last KVP maturity = FV(0.75%,102,-40000,0,1) PV= 0 Pmt= N= 102 R= 0.75 Mode= Begin

3 10) D) Loan amount Purchase Price of the house= PPMT(7.75%/12,1,18*12, ,0) Sell Price= PPMT(7.75%/12,2,18*12, ,0) Short Term Capital Gain= PPMT(7.75%/12,3,18*12, ,0) Deduction availed u/s 80C in AY 08-09= PPMT(7.75%/12,4,18*12, ,0) PPMT(7.75%/12,5,18*12, ,0) So Total Amount to be included in current year's income= PPMT(7.75%/12,6,18*12, ,0) PPMT(7.75%/12,7,18*12, ,0) PPMT(7.75%/12,8,18*12, ,0) PPMT(7.75%/12,9,18*12, ,0) PPMT(7.75%/12,10,18*12, ,0) PPMT(7.75%/12,11,18*12, ,0) Deduction availed u/s 80C for FY Total ) D) 12) A) 13) B) SIP Returns effective/month Weight 1st Year End 2nd Year End 3rd Year End Equity 13% Debt 9% RF 6% Total % RATE(36,-10000,0,424546,1) 11.00%(( %)^12)-1 14) A) Amount of rent pm today *0.8 Amount of rent pm 10 years hence *(1.06^10) Hence the EMI will be = Principal for which the above EMI will be paid PV(1%,12*15, ,0,0) The Principal of loan will be 80% of the value of Property Value of Property = Rs /0.8 15) A) Today 21/02/ /30 25 yrs. 21/02/ ULIP - 2 Withdrawal 15/09/ FV(8%,10,-17133,0,1) /12 ULIP - 1 Withdrawal 5/5/ FV(8%,10,-25000,0,1) / /12 Years to corpus after 25 years for ULIP-2 from withdrawal = 18 years, 5 months, 6 days /12+6/(30*12) Years to corpus after 25 years for ULIP-1 from withdrawal = 15 years, 9 months, 16 days /12+16/(30*12) Value of ULIP - 2 amount till corpus after 25 years equity ( /2)*(1+0.13)^ debt ( /2)*(1+0.09)^ Value of ULIP - 1 amount till corpus after 25 years ( /2)*(1+0.13)^ ( /2)*(1+0.09)^ Total value after 25 years sum( ) 16) B)

4 17) D) 18) A) 19) A) Suneel Gupta - Solutions 20) A) Load charged by the Scheme = 2.25% Face Value of units Rs Purchase price per unit Rs *(1+2.25%) Investment Amount Rs. 50,000 No. of unit allotted = 4, / ) B) PV= N= 10 Pmt= 5500 R= 1.77% per month 23.43% per annum 22) C) 23) A) Annual Contribution= Term Insurance Charges= Investment Portion= p.a Minimum Guarantee= Maximum So IRRs based on company projections= Minimum= 4.26% RATE(20,-23263,0,741741,1) Maximum= 9.97% RATE(20,-23263,0, ,1) 24) A) 25) A) 26) A) Pension Required= Rs per month Time= 15 Years Rate of Return= 8.50% p.a.effective equivalent to % p.m.effective Rate of Inflation= 5% p.a.effective equivalent to % p.m.effective No. of years pension is required 15 years = 180 months ( % %)/( %) Inflation Adjusted Rate of Return= % per month effective ( )/( ) Present Value of Pension on retirement = 3,559,354 PV( %,180,-25000,0,1) Amount required for Ashish is Rs. 10 lakh (then prices) when he completes 30 years of age Amount required for the other two children is inflation adjusted Rs.10 lakh equivalent to the amount given to Ashish, when each one of them completes 30 years of age.

5 27) B) Cur Age Age on Suneel's Amount / Equivalent amount due on PV at Suneel's retirement retirement their respective age of 30 Ashish on Suneel's retirement Sneha *(1.05)^(30-27) 3 years after Suneel's retirement /(1 Garima *(1.05)^(30-25) 5 years after Suneel's retirement /(1 Total fund required on Suneel's retirement 6,314, Total ) B) Outflow of money on 20- Jun Jul Inflow on 1-Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul YTM on purchase % on semi-annual effective basis % on annual effective basis ( )^2-1 Reduction in yield since purchase 100 bps Required Yield 4.887% on annual effective basis ( %) % on semi-annual effective basis ( )^(1/2)-1 Future inflows 1-Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Discounting at required Yield these cash inflows as on 01-Jul-2009 PV of interest inflows 3, PV(2.4144%,11,-400,0,1) PV of principal receipt 7, /( %)^5 PV of inflows as on 01-Jul ,794 ( ) PV of inflows as on 28-Feb /( %)^(1/3) 29) B)

6 30) A) CII Date of purchase= 13/04/ Date of Sale= 28/02/ Purchase Price= 5 lakh Sale Price= 13 lakh LTCG= (500000*582/480)= (500000*582/480) Less: Basic exemption= Taxable LTCG= *0.2 E.Cess=3% *0.03 Total Tax Liability= Or ** No deduction u/s 80C from LTCG is allowed 31) C) 32) C) As any gratuity payment to central/state government servants is tax free

Insured person. Date of Commencement

Insured person. Date of Commencement FPSBI/M-VI/02-01/09/SP-10 Case Study: Sameer Sopori Today is 21 st February 2009. Sameer Sopori (30 years) & Urvi Sopori (31 years) both work for a prominent private sector airline. They got married a