Sameer Soopari - Solutions

1)

B)

2)

D)
Total Purchase Price=
75% Loan @12% (monthly compounding)=
Margin Money=
After 6 months sell price=
After 6 months loan repayment=(750000*1.01^6)=
Total Gain=

1000000
750000
250000
1100000
796140
303860

PV=
FV=
N=
R=
Annual Rate=

250000
303860
6 months
3.3052% monthly
47.73% Annual

3)

lakh
lakh
lakh
lakh
750000*1.01^6
1100000-796140

RATE(6,0,-250000,303860,0)
((1+3.3052%)^(12)-1)

A)
Annual Premium=
Term=
15 Years
SA=
1 lakh
Term Premium=
550 Rs.
Annual Effective Investment=
Final Maturity=(40000+10000+(3500*15)=

-9832

-9282

550-9832
102500

-9832
-9832
-9832
5168
-9832
-9832
5168
-9832
-9832
5168
-9832
-9832
5168
-9832
-9832

550
550
550
550
550
550
550
550
550
550
550
550
550
550
550
IRR=

4)

B)

5)

B)
Single premium=
Annual Premium=
Term=
Discount rate=
PV @6% for 20 years in begin mode=
So Option 2 is suitable

180000
12850
20 years
6%
156232 PV(6%,20,-12850,0,1)

-9282
-9282
-9282
5718
-9282
-9282
5718
-9282
-9282
5718
-9282
-9282
5718
-9282
-9282
102500
2.99%

6)

7)

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

877899 200000*(1+r)/r

Vallue of this Perpetuity Due in today's terms, i.e. a year in advance @ 9% p.a.

805412 877899/(1+0.09)

A)
Cash in hand with sameer & Urvi= (250000+100000)
Their Current Monthly Expense=
Annual expense/12= (22500/12)=
Annual Insurance/12=(116375/12)=
Home Loan EMI=
Total
6 Months' Reserv=57266*6=

350000
27220
1875
9698
18473
57266
Surplus=

8)

9)

A)
On Road Price=
Addition due to expenses over Ex Showroom Price=
So Ex showroom Price
Loan
So Loan Amount=
Rate of Interest=11.50%
Term=
EMI=
Total Repeyment=(8052*36)=
Original Loan=
Total Interest Paid=

29.50% (1.09)^3-1)

343596
6404

350000-343596

350000
7.50%
325581
350000/1.075
75%
244186
325581*75%
11.50% per year
3 years
8,052 PMT(11.5%/12,3*12,-244186,0,)
289872
244186
45686
289872-244186

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. 40000 every month and invest the same @0.75% monthly interest at begin of every month
So value of balanced fund at the time of last KVP maturity =
6181015 FV(0.75%,102,-40000,0,1)+40000
PV=
0
Pmt=
-40000
N=
102
R=
0.75
Mode=
Begin

10)

D)
Purchase Price of the house=
Sell Price=
Short Term Capital Gain=
Deduction availed u/s 80C in AY 08-09=

Loan amount

So Total Amount to be included in current year's income=

1552246

1500000+52246

Deduction availed u/s 80C for FY 2007-08

11)

D)

12)

A)

13)

B)

SIP
Returns
Equity
Debt
RF

14)

15)

16)

Total

4598
4628
4658
4688
4718
4749
4779
4810
4841
4873
4904
52246

PPMT(7.75%/12,1,18*12,-2148000,0)
PPMT(7.75%/12,2,18*12,-2148000,0)
PPMT(7.75%/12,3,18*12,-2148000,0)
PPMT(7.75%/12,4,18*12,-2148000,0)
PPMT(7.75%/12,5,18*12,-2148000,0)
PPMT(7.75%/12,6,18*12,-2148000,0)
PPMT(7.75%/12,7,18*12,-2148000,0)
PPMT(7.75%/12,8,18*12,-2148000,0)
PPMT(7.75%/12,9,18*12,-2148000,0)
PPMT(7.75%/12,10,18*12,-2148000,0)
PPMT(7.75%/12,11,18*12,-2148000,0)

10000
effective/month
Weight
1st Year End
2nd Year End
3rd Year End
13%
0.010236844
0.62
79541
168538
267325
9%
0.007207323
0.22
27670
58132
91944
6%
0.004867551
0.16
19818
41363
65277
Total
1
127030
268033
424546
0.87320% RATE(36,-10000,0,424546,1)
11.00%((1+0.8732%)^12)-1

A)
Amount of rent pm today
Amount of rent pm 10 years hence
Hence the EMI will be =
Principal for which the above EMI will be paid
The Principal of loan will be 80% of the value of Property
Value of Property = Rs.

12000
15000*0.8
21490.17 12000*(1.06^10)
21490.17
1790597 PV(1%,12*15,-21490.17,0,0)
2238246

A)
Today
21/02/2009
25 yrs.
21/02/2034
ULIP - 2
Withdrawal
15/09/2015
268054.1367 FV(8%,10,-17133,0,1)
ULIP - 1
Withdrawal
5/5/2018
391137.1866 FV(8%,10,-25000,0,1)
Years to corpus after 25 years for ULIP-2 from withdrawal =
18 years, 5 months, 6 days
Years to corpus after 25 years for ULIP-1 from withdrawal =
15 years, 9 months, 16 days
Value of ULIP - 2 amount till corpus after 25 years
equity
0.13
1275278.86 (268054.1367/2)*(1+0.13)^18.43333
debt
0.09
656277.67 (268054.1367/2)*(1+0.09)^18.43333
Value of ULIP - 1 amount till corpus after 25 years
1347856 (391137.1866/2)*(1+0.13)^15.79722
762834 (391137.1866/2)*(1+0.09)^15.79722
Total value after 25 years
4042247 sum(1275279+656278+1347856+762834)
B)

2148000
1
2
3
4
5
6
7
8
9
10
11

3500000
5000000
1500000
52246

1790597/0.8

4.5+21/30
5.20
18
9.57
15 8+47/30
18.43 18+5/12+6/(30*12)
15.79 15+9/12+16/(30*12)

18.43333
15.79722 18+5.2/12
15+9.57/12

Suneel Gupta - Solutions

17)

D)

18)

A)

19)

A)

20)

A)
Load charged by the Scheme =
Face Value of units
Purchase price per unit
Investment Amount
No. of unit allotted =

21)

B)
PV=
N=
Pmt=
R=

Rs.
Rs.
Rs.

2.25%
10.00
10.225
50,000
4,889.976

10*(1+2.25%)
50000/10.225

-50000
10
5500
1.77% per month
23.43% per annum

22)

C)

23)

A)
Annual Contribution=
Term Insurance Charges=
Investment Portion=
Minimum Guarantee=
Maximum Projection @10%=
So IRRs based on company projections=
Minimum=
Maximum=

50263
27000
23263 p.a.
741741
1460179
4.26%
9.97%

50263-27000

RATE(20,-23263,0,741741,1)
RATE(20,-23263,0,1460179,1)

24)

A)

25)

A)

26)

A)
Pension Required=
Rs.
25000 per month
Time=
15 Years
Rate of Return=
8.50% p.a.effective
equivalent to
0.68214934% p.m.effective
Rate of Inflation=
5% p.a.effective
equivalent to
0.40741238% p.m.effective
No. of years pension is required
15 years =
180 months
(0.68214934%-0.40741238%)/(1+0.40741238%)
Inflation Adjusted Rate of Return=
0.2736222% per month effective
(.68215-.40741)/(1+.40741)
Present Value of Pension on retirement =
3,559,354 PV(0.2736222%,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.

Cur Age

Age on Suneel's
retirement
Ashish
26
30
Sneha
23
27
Garima
21
25
Total fund required on Suneel's retirement
27)

B)

28)

B)
Outflow
of
money on 20Jun-2008
Inflow on

-11100
400
400
400
400
400
400
400
400
400
400
400
10400
YTM on purchase
2.9014% on semi-annual effective basis
5.88700% on annual effective basis
(1+.029014)^2-1
Reduction in yield since purchase
100 bps
Required Yield
4.887% on annual effective basis
(5.887 5-1%)
2.4144% on semi-annual effective basis
(1+2.4144)^(1/2)-1
Future inflows
1-Jul-09
400
1-Jan-10
400
1-Jul-10
400
1-Jan-11
400
1-Jul-11
400
1-Jan-12
400
1-Jul-12
400
1-Jan-13
400
1-Jul-13
400
1-Jan-14
400
1-Jul-14
10400
Discounting at required Yield these cash inflows as on 01-Jul-2009
PV of interest inflows
3,916.37 PV(2.4144%,11,-400,0,1)
PV of principal receipt
7,877.56 10000/(1+4.887%)^5
PV of inflows as on 01-Jul-2009
11,794 (3916+7878)
PV of inflows as on 28-Feb-2009
11608 11794/(1+4.887%)^(1/3)
29)

B)

1-Jul-08
1-Jan-09
1-Jul-09
1-Jan-10
1-Jul-10
1-Jan-11
1-Jul-11
1-Jan-12
1-Jul-12
1-Jan-13
1-Jul-13
1-Jan-14
1-Jul-14

Amount / Equivalent amount due on

their respective age of 30
1000000
on Suneel's retirement
1157625 1000000*(1.05)^(30-27)
3 years after Suneel's retirement
1276282 1000000*(1.05)^(30-25)
5 years after Suneel's retirement
6,314,454 3559354+2755099

PV at Suneel's retirement

Total

1000000
906314 1157625/(1+8.5%)^(3)
848785 1276282/(1+8.5%)^(5)
2755099

30)

A)
Date of purchase=
13/04/04
Date of Sale=
28/02/09
Purchase Price=
Sale Price=
LTCG= 1300000-(500000*582/480)=
Less: Basic exemption=
Taxable LTCG=
Tax @20%=
E.Cess=3%
Total Tax Liability=
Or
** No deduction u/s 80C from LTCG is allowed

CII
480
582
5
13
693750
180000
513750
102750
3082.5
105832.5
105830

lakh
lakh
1300000-(500000*582/480)
693750-180000
513750*0.2
102750*0.03
102750+3082.5

31)

C)

32)

C)
As any gratuity payment to central/state government servants is tax free