Accounts-Pl solve the same urgently
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
27 November 2010
As an investment advisor you have been approached by a client called Ramesh, who wants some help in investment related matters.
Ramesh is currently 45 years old and has Rs 6, 00,000 in the bank. He plans to work for 15 more years and retire at the age of 60. Ramesh’s present salary is Rs 4, 00,000 per year. He expects his salary to increase at the rate of 12% per year until his retirement.
Ramesh has decided to invest his bank balance and future savings in a portfolio in which stocks and bonds will be equally weighted. Assume that these proportions will be maintained by him throughout. He also believes that bonds will provide a return of 7% and stocks a return of 13%.
Once Ramesh retires at the age of 60 he would like to withdraw Rs 5,00,000 per year from his investments for the following 15 years as he expects to live up to the age of 75 years. He also wants to give Rs 10, 00,000 to his children at the end of his life. How much money would he need 15 years from now?
How much should Ramesh save each year for the next 15 years to be able to meet his investment objectives spelt out? Assume that the savings will occur at the end of each year.
Suppose Ramesh wants to donate Rs 2, 00,000 each year in the last 3 years of his life to a charitable cause. Each donation would be made at the beginning of the year. How much money would he need when he reaches the age of 60 to meet this specific need? Ignore the tax factor to answer these questions.
Ramesh is currently 45 years old and has Rs 6, 00,000 in the bank. He plans to work for 15 more years and retire at the age of 60. Ramesh’s present salary is Rs 4, 00,000 per year. He expects his salary to increase at the rate of 12% per year until his retirement.
Ramesh has decided to invest his bank balance and future savings in a portfolio in which stocks and bonds will be equally weighted. Assume that these proportions will be maintained by him throughout. He also believes that bonds will provide a return of 7% and stocks a return of 13%.
Once Ramesh retires at the age of 60 he would like to withdraw Rs 5,00,000 per year from his investments for the following 15 years as he expects to live up to the age of 75 years. He also wants to give Rs 10, 00,000 to his children at the end of his life. How much money would he need 15 years from now?
How much should Ramesh save each year for the next 15 years to be able to meet his investment objectives spelt out? Assume that the savings will occur at the end of each year.
Suppose Ramesh wants to donate Rs 2, 00,000 each year in the last 3 years of his life to a charitable cause. Each donation would be made at the beginning of the year. How much money would he need when he reaches the age of 60 to meet this specific need? Ignore the tax factor to answer these questions.
27 November 2010
How much money would he need 15 years from now?
This has to be done in 2 parts.
1st we should address 5 lacs withdrawal.
N=15 Years
rate of interest = 10% (7%+13%/2)
PYT=5 lacs
FV = 0
PV? = We get 38,03,040
This has to be done in 2 parts.
1st we should address 5 lacs withdrawal.
N=15 Years
rate of interest = 10% (7%+13%/2)
PYT=5 lacs
FV = 0
PV? = We get 38,03,040
27 November 2010
2nd we should address 10 lacs issue
N=15 Years
rate of interest = 10% (7%+13%/2)
PYT=0
FV = 10 lacs
PV? = We get 239,392
N=15 Years
rate of interest = 10% (7%+13%/2)
PYT=0
FV = 10 lacs
PV? = We get 239,392
27 November 2010
So at 60 he should have 38,03,040+239,392=40,42,432
27 November 2010
How much should Ramesh save each year for the next 15 years to be able to meet his investment objectives spelt out?
N=15 Years
rate of interest = 10% (7%+13%/2)
PV=6,00,000
FV = -40,42,432 lacs
PMT? = We get 48,346.34
N=15 Years
rate of interest = 10% (7%+13%/2)
PV=6,00,000
FV = -40,42,432 lacs
PMT? = We get 48,346.34
27 November 2010
How much money would he need when he reaches the age of 60 to meet this specific need?
This has to be done in 2 parts.
IMPORTANT - CASHFLOWS OCCUR AT THE BEGGINING OF THE YEAR
This has to be done in 2 parts.
IMPORTANT - CASHFLOWS OCCUR AT THE BEGGINING OF THE YEAR
27 November 2010
1st we should address 2 lacs withdrawal.
N=3 Years
rate of interest = 10% (7%+13%/2)
PYT=2 lacs
FV = 0
PV? = We get 5,47,107
N=3 Years
rate of interest = 10% (7%+13%/2)
PYT=2 lacs
FV = 0
PV? = We get 5,47,107
27 November 2010
1st we should address 2 lacs withdrawal.
N=3 Years
rate of interest = 10% (7%+13%/2)
PYT=2 lacs
FV = 0
PV? = We get 5,47,107
N=3 Years
rate of interest = 10% (7%+13%/2)
PYT=2 lacs
FV = 0
PV? = We get 5,47,107
27 November 2010
2nd we should address how much cash we should have at 60 issue
N=13 Years
rate of interest = 10% (7%+13%/2)
PYT=0
FV = 5,47,107 lacs
PV? = We get 158,477
N=13 Years
rate of interest = 10% (7%+13%/2)
PYT=0
FV = 5,47,107 lacs
PV? = We get 158,477
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