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CPC Booklet
CPC Booklet
CRORES PLANNERS
COURSE (CPC)
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PREFACE
CRORES PLANNERS COURSE (CPC)
How to achieve seemingly impossible financial goals
without any prior finance knowledge
Everybody works hard to earn and wants to make the best out of their earnings. Unfortunately
90-98% people lose money particularly in equity investment and many more waste their hard-
earned money investing in inferior products, and they are not even aware of it.
People are intelligent, but they are busy in their daily jobs and businesses. Free knowledges are
neither always trustworthy, nor properly organised, nor give personalised answers.
Crores Planners Course (CPC) is a first step towards the missing links.
For details you can visit the webpage via the following link or scan
the QR code.
https://www.utpalkc.com/croresplanners
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1st Edition
April 2022
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(1) if you invest a lump-sum amount in any instrument like fixed deposit or
mutual fund, how much it will become after a certain period of time.
(2) if the frequency of interest payment is more than once in a year like quarterly
or half-yearly, then how to calculate the final amount receivable after a certain
period of time.
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=FV(Rate%,NPER,0,PV)
=FV(9%,3,0,-100000)
=129,502.90
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The basic steps for solving any investment issue are as follows:
Step #1: Draw the timeline
0 1 2 3 Years
Step #2: Place cashflows under the timeline & note rate (if any)
0 9% 1 2 3 Years
-Rs 100,000 Rs ?
Note, cash outflows are marked -Ve.
-Rs 100,000 Rs ?
PV [Present Value] FV [Future Value]
0 9% 1 2 3 Years
Amount Today Amount after 1 yr Amount after 2 yrs Amount after 3 yrs
Rs 100,000 Rs 100,000 + 9% x Rs 100,000
Rs 109,000 + 9% x Rs 109,000
Rs 118,810 + 9% x Rs 118,810
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This means:
(1) Number of periods is 6 half years (Years x 2)
(2) Rate is 4.5% per half year (Rate / 2)
NPER
RATE (Half yrs) 6
0 4% 1 2 3 4 5
- Rs 100,000 Rs ?
PV FV
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After the end of the session you will be able to work out, how much you
can make by investing a fixed amount at a certain interval of time in any
instrument like mutual fund or deposits.
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=FV(Rate%,NPER,PMT,0,1)
=FV(9%,3,-120000,0,1)
=428,775.48
Let me explain:
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=FV(Rate%,NPER,PMT,0,1)
=FV(9%,3,-120000,0,1)
=428,775.48
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0 9% 1 2 3 Years
Amount Today Amount after 1 yr Amount after 2 yrs Amount after 3 yrs
Rs 120,000 Rs 120,000 Rs 120,000
+
+
Rs 120,000 (1+9%)
Rs 250,800 (1+9%)
Rs 393,372 (1+9%)
Like lump-sum investments, in case of SIP also we need to adjust the RATE and
NPER if the instalments are paid at an interval shorter than a year like in monthly
SIP, quarterly SIP or half-yearly SIP.
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2. If you invest Rs 10,000 every month in a scheme how much money will
you get after 3 years? The investment scheme gives a return of 9% per
year payable monthly.
This is a monthly systematic investment plan or monthly SIP. So our periods are
months not year.
Rate of return is 9% per year. So, per month return is (9% / 12 =) 0.75%
NPER (Months)
RATE
0 0.75% 1 2 3 35 36
=FV(0.75%,36,-10000,0,1)
=414,613.61
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%
Level 3:
After completing the session you will be able to work out the return on any kind
$
of investments like lump-sum investment, SIP or irregular investment patterns.
You will be able to use different methods of calculating ROI like RATE, IRR &
XIRR
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CF CF CF CF CF
PMT
CF CF
PV FV
If you know other elements, then you can find out the RATE using the following
spreadsheet function:
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The timeline:
NPER (Years)
0 RATE (?) 1 2 3 4 5
- Rs 65/- Rs 100
PV FV
In this case,
RATE = ?
NPER = 5
PMT = 0
PV = - 65
FV = 100
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RATE = ?
NPER = 60
PMT = -1000
PV = 0
FV = 84400
- Rs 100,000 -Rs 110,000 -Rs 90,000 -Rs 120,000 -Rs 100,000. Rs 775,000
FV
In this case there is no PMT, because cashflows are not uniform. So we can’t use RATE
function.
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B2
B7
=IRR(B2:B7)
Note that IRR can be used when periods are uniform, but cashflows are not
uniform. Cashflows can be +Ve, -Ve or zero.
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4. Consider, you have been investing in different shares. Some time
you invest, sometime you withdraw. You have been maintaining
your diary as follows:
In this case time interval of cashflows are not uniform. So we can’t use IRR
function.
=XIRR(CF1,CF2,CF3,………, Date1,Date2,Date3….)
Like in IRR, in XIRR also we need to give the inputs in a different way in
spreadsheet.
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B2
A2
A8 B8
=XIRR(B2:B8,A2:A8)
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After completion of the level you will be able to explain different kinds of mutual
funds based on investments. And how different kind of mutual funds give
different kind of returns under different circumstances.
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• Mutual fund companies collect money from the investors and then
the entire pool of money is invested in different types of assets.
Equity Fund: Mutual funds that invest only in shares (also called equities)
Debt Fund: Mutual funds that invest only in debt markets like bonds and
debentures
Balanced or Hybrid Fund: Funds that invest both share and debt
markets
From the above classification you can understand that to master mutual fund you
should have proper knowledge of shares, debt markets and money markets.
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If you buy an equity mutual fund at very high valuation, then there is
very high risk. When there is very high risk, then there is very high
probability of losing money and vice versa
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Market Index Fund: Invest in index stocks. Moderate risk. Good when
market risk is moderate
Large Cap: Invest in large companies. Moderate to high risk. Good when
market risk is moderate to low
Mid Cap: Invests in medium sized companies. Higher risk. Good when
market risk is low
Small Cap: Invests in smaller companies. Very high risk. Good when
market risk is very low
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Debt funds are also risky, measured by duration, but they don’t
fluctuate as widely as equity funds
Depending upon return and risks you must decide whether you
want to go with equity or debt funds. Amongst equity or debt you
need to decide what kind of equity or debt funds.
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• They are also called liquid funds and they are very useful for
businessmen to park idle short-term cash.
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Utpal KC
Utpal KC has been into the field of equity research &
investment banking since 1997. He served the
corporate in various capacities at leadership
positions from 1997 to 2016. Since 2016 he has been
training people on leadership, investment and
management.
https://saintwords.com https://utpalkc.com