Financial Management - Assignment

Team No. : 12
Case A
Name Ramesh
Age 45
Present Bank Balance 600000
Work till 60
Present salary 400000
Growth rate 12%
Time Period 15%
Rate 10%(7%+13%/2)

1.Value of investments at the age of 60 years

Cashflow 500000
N 15
rate 10%
Present Value ₹ 41,83,343.73

2. The value of 1000000 after 15 years

N 15
Rate 10%
FV 100000
PV ₹ 8,36,668.75

At the age of 60 he should have ₹ 50,20,012.47

How much should Ramesh save each year for the next 15 years?
Rate 10%
PV 600000
FV ₹ 50,20,012.47
PMT ₹ 79,114.49

How much money would he need when he reaches the age of 60 to meet this specific need?
200000 withdrawal for charitable cause
N 3
Rate 10%
PMT 200000
FV 0
PV ₹ 5,47,107.44

How much cash we should have at 60

N 13
Rate 10%
PMT 0
FV 547107.44
PV ₹ 1,58,477.54
Case B
Monthly Payment for MBA 1st Year Expenditure ₹ 19,205.25
Monthly Payment for MBA 2nd Year Expenditure ₹ 22,129.76

Compounding Quarterly Payment Monthly (Gradual) Annuity Calculations

Current MBA 1st Year Expenditure ₹ 20,00,000.00
Current MBA 2nd Year Expenditure ₹ 25,00,000.00
Years to MBA 1st Year 10
Years to MBA 2nd Year 11
MBA Expense Growth Rate 5%
Nominal Interest Rate 8%
Compounding per Year 4
Monthly Payments per year 12
Effective Monthly Rate 0.66%
Monthly Payment for MBA 1st Year Expenditure ₹ 19,205.25
Answer (i) Monthly Payment for MBA 2nd Year Expenditure ₹ 22,129.76

Amount Required for Jasleen Wedding ₹ 3,00,00,000.00

Years to wedding 20
Answer (ii) Amount needed for fixed deposit ₹ 61,53,291.84

Annual expenditure after 10 years ₹ 12,00,000.00

Years for Fixed deposit 10
Annuity Interest Rate 10%
Inflation Rate 5%
Amount needed after 10 years ₹ 81,10,828.58
Answer (iii) Monthly Annuity ₹ 58,095.75