Q2.

2
Child-1
Year 0 age
14 400,000 18
15 300,000 19
16 300,000 20
17 300,000 21
18 300,000 22

Inflation 5.50%
Child-1
Years Age of Child Current cost
14 18 400,000
15 19 300,000
16 20 300,000
17 21 300,000
18 22 300,000
19
20
21

Corpus Reqd ₹ 5,167,892.37

Nominal rate of return pa 11%
Nominal rate of return pm 0.11
No of years 13
No of months 156
SIP ₹ 568,468.21

Q2.3

Step 1 Calculate the combined corpus - 1 for husband and wife

Step 2 Calculation of Corpus 2 only for wife-after death of husband
PV at the time of retirement of corpus 2
Step 3 Calculation for corpus 3 - after death of wife
PV at the time of retirement of corpus 3
Step 4 PV of present investment
Step 5 Investment to be made

Year 32 Year 54
Husband 28 60 80
Wife 26 58 78
Corpus 1 Corpus 2
Calcn for corpus-1
Post retirement ror 7% Current exp
Inflation rate 4% Inflation
Real rate 2.88% No of yrs till retirement
Real rate pm 0.2373% Inflation adjusted return
No of yrs 20 Posrt retirement Exp
No of months 240 Corpus - 1 combined at retirement

Calcn for corpus-2 only for wife after death of husband

Post retirement ror 7% Current exp
Inflation rate 4% Inflation
Real rate 2.88% No of yrs till retirement
Real rate pm 0.2373% Inflation adjusted return
No of yrs 2 Posrt retirement Exp
No of months 24 Corpus - 1 combined at retirement
Child-2
Year 0 Age
18 400,000 18
19 300,000 19
20 300,000 20
21 300,000 21
22 300,000 22

Child-2 Discounted CF
Age of Child Total Cost Infl Adj
400,000 846436.58473 762555.481743 ₹ 5,167,892.37
300,000 669742.94767 543578.4008371
300,000 706578.80979 516644.3359308
18 400,000 700,000 1739361.5034 1145771.297552
19 300,000 600,000 1572879.7595 933427.5821757
20 300,000 300,000 829694.07316 443588.3329709
21 300,000 300,000 875327.24718 421608.7308867
22 300,000 300,000 923470.24578 400718.2081851

Year 56 Corpus 1 ₹ 19,060,720.88

Corpus 2 ₹ 7,088,641.48 ₹ 1,831,839.66 =I42/1.07^20
80
Corpus 3 Total corpus ₹ 20,892,560.54

25000
5.50%
32
138681.5595691
104011.1696769
₹ 19,060,720.88

25000
5.50%
52
404639.1592415
303479.3694312
₹ 7,088,641.48
PV