Finance Answers

Mrs. Ram has been saving Rs.15,000 per month for the last 5 years and continue to save

the same amount for the next 15 years for her retirement at age 60. The return on

investment is 12% p.a. compounded monthly. If she withdraws Rs.45,000 per month after

retirement (after 15 years) for the next 20 years (i.e. from age 60 to 80), how much money

will she have at age 80? Assume the same rate of interest on post retirement investment

and withdrawal is at the beginning of the month.

Ms. Shruti is 45 years old and plans to retire at 60. Her life expectancy is 80 years. Ms.

Suman her Financial Planner, estimates that her client will require Rs.540,000 in the first

year after retirement. Inflation rate is 6% p.a. and the rate of return is 10% p.a. What will

be the savings per year required in order to meet this?

Ms Ananaya wanted to have a retirement corpus of Rs.1.5 Crores. She has 18 years to go

for retirement. But now she wants to retire 3 years earlier. What is the additional amount

that she needs to invest each year if the rate of return is 8%?

A twenty-year-old decides to save Rs.1,000 per month into a retirement account that will

mature when she will turn 65. How much will she accumulate assuming that the she gets

a return @12% per annum compounded monthly? How much will a 40-year-old get if he

makes a similar investment? How much more does he need to invest to get the same

amount?

Assume that your father is now 50 years old and plans to retire after 10 years from now. He is expected to live for another 25 years after retirement. He wants a fixed retirement income of Rs. 5,00,000 per annum. His retirement income will begin the day he retires, 10 years from today, and then he will get 24 additional payments annually. Your father has current savings of Rs. 10,00,000 and he expects to earn a return on his savings @ 10% p.a., annually compounding. How much (to the nearest of rupee) must your father save during each of next 10 years to meet his retirement goal?

Calculate the present value of a growing perpetuity with the following information (round off the answer to the nearest rand):


Cash flow at the end of the first year R60 000
Growth rate (g) 10%
Opportunity cost 20%

Q1) For a and b
- Define and identify the type of Income / Expenses
- Treatment of the Income / Expenses in the Profit and Loss account, Impact of the Income / Expenses in the Balance Sheet

a. You purchased 10 shares of L& T Company last year. On 5th March 2019, the company has declared a dividend Rs 50 per share. The income is earned but not yet collected in your account during this financial year.
b. On 5th March 2019, Mehta Brothers received 100% advance for goods, to be supplied in the next month. The Cost of the goods was Rs50000. They usually sells the goods at 10% mark up.

a. Do you see any problems in economic resources being distributed globally?
b. If yes, what? How?
c. Can you suggest remedies to the problem?

As a manager of a firm, you are concerned about a potential change in interest rates, which would affect money market prices. An economic report has recently highlighted the following economic conditions: (i) Bank Negara Malaysia is expected to keep the Overnight Policy Rate (OPR) unchanged in 2021; (ii) Budget deficit is expected to decline slightly in 2021; and (iii) The yield curve in Malaysia currently exhibits a consistent downward slope. Assuming that money market prices are not exposed to credit risk, how will money market prices change based on the report? Explain.

What might be the objective or objectives of each of the following nonprofit institutions?
1.The engineering college at a major state university
2.A police department in a city
3.The emergency room of a hospital
4.A museum