AIMS IBS

FROM,
Dishanth K A
‘B’ section
1ST Year MBA

SUBJECT: FINANCIAL MANAGEMENT

TOPIC: ANALYSIS OF GROWTH RATE OF MARKET

TO,
Ravichandra Reddy
Dean of Academics
AIMS IBS
FINANCIAL MANAGEMENT

GROWTH RATE
The growth rate is the change in percentage of a specific variable within a certain time period.
In terms of investments, the growth rate is described as the compounded annual rate of growth of
a company along the lines of earnings, revenue, dividends, as well as concepts, such as retail sales
and gross domestic product (GDP).

Basically, the growth rate is a metric that is used to express the annual change in a variable,
represented as a percentage. For example, an economy's growth rate is the annual rate change of the
country's GDP—increase or decrease. This rate represents the economy's expansion or recession,
respectively.

Further, if the country's income drops for two consecutive quarters, the country is said to be in
recession. If the country's income grows for two consecutive quarters, it is said to be expanding.

The formula to calculate the present value of a single future sum (also known as a lump sum) is:

PV=FV/ (1+r)n

Where:

PV= Present Value

FV=Future Value

R= rate of interest

n= Number of periods (usually in years)

Future value (FV) is a financial concept that represents the value of an investment or sum of money
at a specific point in the future, considering the effects of compound interest or investment returns. In
other words, it's the amount that a current sum of money will grow to over time when invested or
subject to interest.

The formula to calculate the future value of a single sum (lump sum) is:

FV=PV*(1+r)n

PV= Present Value

FV=Future Value

R= rate of interest

n= Number of periods (usually in years).

BSE INDEX

YEAR POINTS
2013 22386.27
2014 27957.49
2015 25341.86
2016 29620.50
2017 32968.68
2018 38672.91
2019 29468.49
2020 49509.15
2021 58568.51
2022 58991.52
Time Value = Future Value / Present Value

= 58991.52 /22386.27

= 2.6351

Rate of Return =10%

NSE INDEX
YEAR POINTS
2013 6371
2014 8291
2015 7955.55
2016 8197
2017 10538.7
2018 10923.55
2019 12247.1
2020 14024.85
2021 17400.8
2022 18265.25

Time Value = Future Value / Present Value

= 18265.25/6371

=2.8669

Rate of Return = 11%

DERIVATIVES

YEAR FUTURE
2013 429
2014 442
2015 448
2016 464
2017 475
2018 481
2019 515
2020 570
2021 435
2022 496
2023 527

Time Value = Future Value / Present Value

=527/429

=1.228

Rate of Return = 2%

GOLD (BULLION)

YEAR PRICE
2013 29600.00
2014 28006.50
2015 26343.50
2016 28623.50
2017 29667.50
2018 31438.00
2019 35220.00
2020 48651.00
2021 48720.00
2022 52670.00

Time Value = Future Value / Present Value

= 52670/29600

=1.779
 Rate of Return = 5-6%

DEPOSITS
YEAR INTEREST RATE
2013 9.00
2014 9.10
2015 8.75
2016 7.50
2017 6.90
2018 6.70
2019 7.25
2020 6.40
2021 5.35
2022 5.35
2023 5.90
Time Value = Future Value / Present Value

= 9.00/5.90

=1.525

Rate of Return = 4-5%

COMMODITY (multi commodities)

YEAR PRICE
2013 481.85
2014 841.75
2015 924.00
2016 1270.00
2017 914.00
2018 736.00
2019 1169.00
2020 1740.00
2021 1586.00
2022 1501.00

Time Value = Future Value / Present Value

= 1501.00/481.85

= 3.1150
 Rate of Return = 11-12%

INTERPRETATION :

BSE INDEX Rate of Return =10%

NSE INDEX Rate of Return = 11%

DERIVATIVES Rate of Return = 2%

GOLD (BULLION) Rate of Return = 5-6%

DEPOSITS Rate of Return =4-5%

COMMODITY (multi commodities) Rate of Return = 11-12%

As we compare the growth rate of each factor

NSE INDEX Rate of Return = 11% and COMMODITY (multi commodities) Rate of
Return = 11-12%

Both NSE and COMMODITY (multi commodities) gives more rate of Return
than the BSE,DERIVATIVES,GOLD AND DEPOSITS, so it is quiet good to invest in
both NSE and MULTI COMMODITIES.