Solutins : Vinod Gupta 1) A) Initial Investment= -12.5-12.5 lakh Year 1 profit= 3.50/2 1.75 lakh Year 2 profit= 4.74/2 2.37 lakh Year 3 profit= 5.17/2 2.585 lakh Year 4 profit= 6.35/2 3.175 lakh Year 5 profit= 7.10/2+(25*.25)/2 6.675 lakh IRR= 8.20% 2) B) The cost of construction incurred five year ago 1000000 Cost escalation in construction over the last five 70% years Currect cost of construction 1700000 Insurance require for building on reinstatement basis1700000 Insurance require for household contents on market 250000 Total Sum Insurance required 1950000 1000000*1.7 1700000+250000 3) B) According to the Insurance company projections, the accumulated amount at vesting date is The rate of returns in the immediate annuity pension plan would be 1258190 FV(10%,15,-36000,0,1) 0.6141% p.m. RATE(180,11500,-1258190,0,1) Vinod, at this stage, wants to increase his premium amount suitably so as to get this accumulated amount at he end of annuity payment period. Therefore, the revised corpus to be accumulated for immediate annuity of Rs. 11,500 p.m. for 15 years and return of purchase price Assuming the corpus accumulated for annuity is Rs. 100 Monthly pension would be Rs. 0.6104 PMT(0.6141%,180,-100,100,1) Thus pension is Rs. 0.6104 p.m. by investing Rs. 100 at 0.6141% p.m. effective so that he would get Rs. 100 at the maturity
So to get pension of Rs. 11,500 p.m. The corpus should be Rs. 1884027 100*11500/0.6104 4) C) He needs to further invest Rs. 64432 p.a. PMT(10%,11,200000,-1884027,1) 5) C) Total cost of vacation tour= 200000 20000*100/10 Amount to be financed= 180000 200000-20000 Rs. 180,000 is the PV of annuity of Rs. 7,500 payable per month for 36 months PV 180000 PMT -7500 NPER 36 Rate 2.38% p.m. RATE(36,-7500,180000,0,0) Therefore, Annual Effective Rate of Interest 32.61% 6) B) U/s 64(1A) of Income Tax Act (1+2.38%)^12-1 7) C) Since, Long term capital gain for holding of equity shares for more than one year is exempt. 200 shares purchased in 2000-01 and alloted bonus shares sale proceeds exempt from Long term capital gains. Sale of equity share for holding less than one year is liable to short term capital gain Sale Consideration of 100 share issued as Right issue 50000 500*100 Less : Cost of 100 right shares 25000 250*100 Short term capital gain 25000 50000-25000 8) D) 9) B) 10) B)
Sum Assured 600000 Add Bonus 45*600*5 135000 50*600*5 150000 55*600*4 132000 Total Claim 1017000 11) A) Deduction allowed u/s 24 under Income tax Act 180 1-Apr-04 31-Mar-05 1-12 1-Apr-05 31-Mar-06 12-24 1-Apr-06 31-Mar-07 25-36 1-Apr-07 31-Mar-08 37-48 1-Apr-08 31-Mar-09 49-60 30-Apr-2008 49 12242 31-May-2008 50 12194 30-Jun-2008 51 12147 31-Jul-2008 52 12098 31-Aug-2008 53 12050 30-Sep-2008 54 12001 31-Oct-2008 55 11951 30-Nov-2008 56 11901 31-Dec-2008 57 11851 31-Jan-2009 58 11800 28-Feb-2009 59 11748 31-Mar-2009 60 11696 143679 IPMT(11.25%/12,49,180,-1500000,0,0) IPMT(11.25%/12,50,180,-1500000,0,0) IPMT(11.25%/12,51,180,-1500000,0,0) IPMT(11.25%/12,52,180,-1500000,0,0) IPMT(11.25%/12,53,180,-1500000,0,0) IPMT(11.25%/12,54,180,-1500000,0,0) IPMT(11.25%/12,55,180,-1500000,0,0) IPMT(11.25%/12,56,180,-1500000,0,0) IPMT(11.25%/12,57,180,-1500000,0,0) IPMT(11.25%/12,58,180,-1500000,0,0) IPMT(11.25%/12,59,180,-1500000,0,0) IPMT(11.25%/12,60,180,-1500000,0,0) 12) B) 13) A)
Equity 12% 0.9489% (1+12%)^(1/12)-1 Debt 8% 0.6434% (1+8%)^(1/12)-1 Inflation 6% 0.4868% (1+6%)^(1/12)-1 Present Lumpsum at age time period Amount Needed Saurabh 16 21 5 669113 FV(6%,5,0,-500000,0) 8410 Anmol 10 21 11 949149 FV(6%,11,0,-500000,0) 3757 Assuming Debt Equity Total Saurabh 1468 6488 7957 Anmol 4166 21095 25261 14) B) present Exp 500000 after 10 years 895424 FV(6%,10,0,-500000,1) 288303 PV(12%,10,0,-895424,1) after 15 years 1198279 FV(6%,15,0,-500000,1) 218921 257224 3566 Solutions : Vikrant Sahabji 15) B) Present Age Retirement Age Expected Life of Harshada 32 Years 52 years 83 Years Harshada's age on Vikrants Retirement 50 Years Present Expenses 18000 Inflation 6% 0.4868% Balanced 10% 0.7974% Debt 8% 0.6434% Inflation linked Debt 1.8868% 0.1559% House Hold Exp on Retirement Required Corpus at age 52 years 57728 p.m. (1+8%)/(1+6%)-1 PV(12%,15,0,-1198279,1) 288303+218921-250000 PMT((1+12%)^(1/12)-1,120,-257224,0,1) FV(6%,20,0,-18000,1) 12805685 PV(0.1559%,(83-50)*12,-(57728*0.75),0,1) Amount invested per month in Balanced MF 17688 PMT(0.7974%,20*12,0,-12805685,1) 669113*100/7957 949149*100/25261
16) C) Present Age 32 Years Retirement years Age 52 Expected Life Years of Harshada 83 Harshada's age Years on Vikrants Retirement 50 Present Expenses 18000 Inflation 6% 0.4868% (1+6%)^(1/12)-1 Equity 12% 0.9489% (1+12%)^(1/12)-1 Debt 8% 0.6434% (1+8%)^(1/12)-1 Inflation linked Debt 1.8868% 0.1559% (1+0.6434%)/(1+0.4868%)-1 House Hold Exp on Retirement 57728 p.m. FV(6%,20,0,-18000,1) Required Corpus at age 52 years 12805685 PV(0.1559%,(83-50)*12,-(57728*0.75),0,1) Suppose he invests Rs. 100 in each of Equity and Debt MF Schemes At the end of Years 5 10 15 20 Equity 8110 21726 43727 79276 Debt 7341 18693 37036 66675 Closing Balance 15452 40419 80763 145951 If by investing Rs. 100 p.m. he gets Rs. 145951 after 20 years, thus to get Rs. 12805685 he needs to invest Rs. 8774 (12805685/145951)*100 17) A) 50% of Equity MF Market Value today 130000 260000*0.5
Equity MF Returns Monthly effective rate Yearly Inflation Amount Needed for Himanshu's Higher education 12.00% p.a. 0.9489% p.m. 6.00% p.a. At the age of 17 years 762106 300000*(1.06)^16 124316 762106/1.12^16 At the age of 18 years 807832 762106*1.06 117656 807832/1.12^17 At the age of 19 years 856302 807832*1.06 111353 856302/1.12^18 At the age of 20 years 1512800 500000*1.06^19 175646 1512800/1.12^19 At the age of 21 years 1603568 1512800*1.06 166237 1603568/1.12^20 Total PV of educational expenses 695208 Current Market Value of investment 130000 PV of balance amount to be accumulated in 19 more years 565208 695208-130000 SIP for the next 19 years to achieve this corpus 6,068 PMT(0.9489%,19*12,-565208,0,0) 18) B) 2009-10 2008-09 Basic 39000 35455 39000*100/110 35455 Dearness Allowance 15600 14182 15600*100/110 14182 Transport Allowance 1000 1000 200 55600 50636 49836 54820 (49836*0.1)*11 19) A) Quaterly Contribution 3000 20) B) Outstanding Balance Contribution during the FY Interest Closing Balance end of FY FY From FY To 1-Jan-2010 31-Mar-2010 25000 3000 2060 30060 1-Apr-2010 31-Mar-2011 30060 12000 3005 45065 1-Apr-2011 31-Mar-2012 45065 12000 4205 61270 1-Apr-2012 31-Mar-2013 61270 12000 5502 78772 1-Apr-2013 31-Mar-2014 78772 12000 6902 97673 1-Apr-2014 31-Mar-2015 97673 12000 8414 118087 1-Apr-2015 31-Mar-2016 118087 12000 10047 140134 (1+12%)^(1/12)-1 PV of such amounts if invested @12% p.a.
21) B) 22) A) 23) B) Present Expenses 18000 Inflation Rate 6.00% 0.4868% (1+6%)^(1/12)-1 Debt Returns 8% 0.6434% (1+8%)^(1/12)-1 Inflation adjusted returns 1.8868% 0.1559% (1+1.8868%)^(1/12)-1 present age of Harshada 30 years expected life of abhilasha 83 years Life insurance needed 7270440 PV(0.1559%,(83-30)*12,-18000,0,1) 24) C) 25) A) Sd of Portfolio = [(Wa^2*SDa^2)+(Wb^2*SDb^2)+(Wc^2*SDc^2)+(2*Wa*Wb*þab*Sda*SDb)+(2*Wa*Wc*þac*SDa*SDc)+(2*Wb*Wc*þbc*SDb*SDc)]^(1/2) Portfolio Weight (W) Exon (a) 0.4 Futon (b) 0.4 Eltron (c) 0.2 correlation coefficient (þ) þab 0.40 þac 0.60 þbc 0.70 The variance of portfolio is ((0.4)^2 * (6)^2 + (0.4)^2 * (9)^2 +(0.2)^2*(10)^2)+((2*.4*.4*.4*6*9)+((2*.4*.2*.6*6*10))+((2*.4*.2*.7*9*10)) 26) D) 27) C) 28) A) 45.47 The Standard Deviation of Portfolio Return is 6.74