1

An investor plans to save Rs. 2,00,000 per year, to build a corpus of Rs. 40,00,000 for a
financial goal 10 years from now. Which option will help him achieve his goal? (A) Regular
year end investments in an asset yielding average annual return of 14%. (B) Additional
investments of Rs. 30,000, putting the net amount in a comparatively low risk product
yielding 11 % annual return.

Amit and Sunil are 35 years old and both are 15 years away from their retirement. Amit
invests Rs. 25,000 p.a. for 10 years and stops but remains invested. Sunil starts investing
Rs. 1 lakh p.a. after Amit stops and does so till his retirement. What can be said about
their corpus at the time of their retirement assuming their investments earn 10% p.a.
compounded yearly? Assuming both are investing in ordinary annuity.

Krishna, aged 30 years, wants to know the real worth of his investments after 25 years. He
is investing Rs. 2, 00,000 every year in an equity diversified fund generating 14% p.a. and
the average inflation rate for the duration is 8% p.a.

Ramit wants to accumulate money to buy a car worth Rs. 5.6 lakhs after 4 years. He
wishes to invest money at the beginning of every quarter for the first 3 years and he
cannot save any more money after that. Calculate the amount of saving required every
quarter if the rate of return on investments is 14.25% compounding quarterly

A sum of Rs 50000 is invested every year end at a rate of 5% p.a. After 7 years the rate of
interest was changed to 5% p.a. compounded half yearly. After a further period of 3 years,
the rate was again changed to 6% p.a. compounded quarterly. Find the accumulated
amount at the end of 15 years from commencement?

An individual has recently purchased a house worth Rs. 40 lakh for self-occupation by
availing housing loan of Rs. 28 lakh at 9.25% p.a. rate of interest. The tenure of loan is 18
years. He has Rs. 12 lakh financial assets at present. He is expected to save annually Rs.
2 lakhs which he invests on a quarterly basis beginning a quarter from now in an
instrument which is expected to provide return of 9% p.a. What would be his net worth five
years from now? The value of the house which is for consumption purposes is not
considered in the net worth so arrived.

Sita and Tia, start investing every month end for their retirement (scheduled at age 60).
Sita starts investing Rs. 2000 from age of 30 years and Tia starts investing Rs. 4,000 from
40 years of age. Which of the following is correct if annual rate of return on investment to
be 12%?

Mr. Naresh has been saving Rs. 2 lakhs every year for the last 10 years. This money has
been invested in a diversified equity scheme which gives an average return of 14.25% p.a.
He has stopped saving in this account and has started saving total Rs. 15,000 per month
through 3 SIP's (systematic investment plans) for 3 years. The average return on these 3
investments is 12.75% per annum, compounded monthly. How much will be accumulated
from both the investments after 3 years?

Deepak, aged 35 years, is planning to retire at 55. His present monthly expenses are Rs.
75,000. Assuming inflation as 8% p.a. and life expectancy of 75 years, calculate the
difference in retirement corpus if he delays his retirement by 5 years and retires at 60.

10

Rakhi, aged 30 years, wishes to retire at 50. She starts an investment of Rs. 2,50,000
every year end for building her retirement corpus. Assume an average annual return of
12% for her on these investments during the accumulation period (20 years). On
retirement she plans to withdraw her entire corpus and invest in a fixed deposit yielding
4% p.a post inflation. In case her life expectancy is 75 years, calculate the allowable
monthly withdrawals by Rakhi from this corpus.

11

Saloni, aged 40, is a working professional. Her present household expenses are Rs. 50,
000 per month. How much amount will she be requiring every month at her age of 60
years if inflation is 7.25% p.a for this entire period? Assume she is investing all her savings
in bank deposit yielding 8.75% p.a

12

Azim, aged 30 years, wishes to retire at 55. If his present monthly expenses are Rs.
50,000 and life expectancy is 75 years, calculate the additional corpus required in case he
lives longer by 5 years than his life expectancy. Assume inflation to be 7.5% p.a.

13

The average inflation over the last three years is 8.5 % p.a. You invested Rs. 1 lakh in a
security 3 years ago which you have redeemed for Rs. 1.3 lakh. What real return have you
obtained from investment?

14

Ravi, 40-year old man, spends Rs. 6 lakhs p.a., almost the amount he earns, to maintain
his family. He expects his expenses to rise by 7% p.a. He has not saved for retirement. He
has a second house which he wants to rent at Rs. 18,000 p.m. immediately, the rent
expected to increase by 7 % p.a. You advise him to create a corpus by his age of 60 by
investing the rent received in an instrument yielding 10% p.a. at the end of every year. The
accumulated corpus would last ____ number of years taking the received rents postretirement into account.

15

Rajesh, aged 35 years, wishes to retire at 60. If his present monthly expenses are Rs.
50,000 and life expectancy is 75 years, calculate the additional corpus required in case he
lives longer by 10 years than his life expectancy. Assume inflation to be 7.5% p.a.

16

A 45-year old man spends Rs. 7.5 lakh p.a., almost the amount he earns, to maintain his
family. He expects his expenses to rise by 7% p.a. He has not saved for retirement. He
has a second house which he wants to rent at Rs. 20,000 p.m. immediately, the rent
expected to increase by 7 % p.a. You advise him to create a corpus by his age of 60 by
investing the rent received in an instrument yielding 9% p.a. at the end of every year. The
accumulated corpus would last ____ number of years taking the received rents postretirement into account.

17

Alok, aged 40 years, works with ABC Ltd and spends Rs. 2.5 lakhs p.a. plans to retire at
age 60 and expects to live till 75 years. The basic inflation at 7% p.a. and lifestyle inflation
at 1.5% p.a. are expected in the pre-retirement period. He starts investing for retirement at
Rs. 50,000 p.a. in a 10% p.a. return instrument with immediate effect, and increases the
contribution by 15% every year of the prior year investment amount. If the expenses postretirement are curtailed by 10%, what maximum inflation would sustain his corpus till he
survives, if the corpus is invested at 9% p.a.?

18

Mr. A purchased a flat worth Rs. 50 lakh in January 2007 by availing a housing loan of Rs.
35 lakh for tenure 15 years at the rate of 9% p.a. The value of his flat as in January 2013
has appreciated to Rs. 90 lakh. What approximate value of home equity can he consider
in his flat towards his unencumbered interest after also setting aside 15% of the
appreciation value towards taxes and other costs to be discharged on selling the unit?

19

Both Ramesh and Suresh are 30 years old. Ramesh starts saving Rs. 50, 000 every year
and will save for 10 years while Suresh has been saving Rs. 15,000 every year since last
10 years and will continue to save for next 10 years also. Which of the following statement
is true after 10 years, if return on investments is expected to be 12% p.a.?

20

Mr. X who is 40 years old spends annually Rs. 7 lakhs towards his household expenses.
He expects to retire at 62 years. During this period inflation is expected to be on an
average 6% p.a. He wants to cover 35 years living expenses for self and spouse. If the
inflation in the post-retirement period moderates to an average of 4% p.a. and he expects
to generate a return of 7% from his accumulated corpus, what corpus should he target for
a comfortable retirement?

21

A 40 year old person spending Rs. 3 lakh p.a. plans to retire at age 63 and expects to live
till 75 years. The basic inflation at 7% p.a. and lifestyle inflation at 1.75% p.a. are expected
in the pre-retirement period. He starts investing for retirement at Rs. 30,000 p.a. in a 10%
p.a. return instrument with immediate effect, and increases the contribution by 20% every
year of the prior year investment amount. If the expenses post-retirement are curtailed by
20%, what maximum inflation would sustain his corpus till he survives, if the corpus is
invested at 7% p.a.?

22

Rakesh, aged 40, years works with ABC Ltd. His present monthly expenses are Rs.
30,000. He will retire at the age of 60 years. On retirement he is planning to go for a
holiday for which expenses in present terms are Rs. 2.50 lakhs. How much retirement
corpus is required by Rakesh to sustain his post retirement expenses including his goal of
vacation? Assume post retirement Rakesh will require 80% of his pre-retirement
expenses; life expectancy 75 years, general inflation 6% p.a. and investment yields to be
10% p.a. throughout the period.

23

Mr. A had taken a loan of Rs. 40 lakh in July 2010 at a floating rate of interest of 10% p.a
for tenure of 20 years from a housing finance company. The company sent a notice raising
the interest rate to 10.75% p.a. effective January 2012 thereby increasing EMI. He
decides to refinance the loan at 10.25% from a bank which charges a processing fee of
1% of loan sanctioned. What absolute amount he stands to save in the remaining tenure if
the outstanding loan amount as at end of March 2012 is refinanced so that the new loan
terminates as per original tenure?

Neither option will make him meet his goal

Amit saves more than Sunil by Rs. 31,175

Rs. 1, 08, 90,082

Rs. 32,679

Rs. 1, 09,889

s 6.68 lakhs

Sita saves Rs. 24, 59,183 more than Tia

Rs.73,30,786

Rs. 1,20,67,228

Rs. 94,062

Rs. 2, 02,729

Rs. 36,25,051

0.59%

17.15 years

Rs. 88,29,279

8 years

0.88%

Rs 57.79 lakhs

Suresh saves Rs. 2, 27,752 more than Ramesh

Rs. 5, 67, 15, 821

6.07%

Rs. 1,38,70,308

Rs. 2,39,401