Basic Excel FunctionsProblems

1
A promises to pay B a sum of Rs. 20000 at the end of 3 years and another Rs. 40000 at the end of 5 years from now. What cash amount should be accepted now in lieu of the above two payments if interest is 5% p.a?

2
An employee aged 35 years invested Rs. 10000 in a savings instrument. The interest during the first 5 years is 8% pa and thereafter 6% pa. What amount would he get on retirement at the age of 58 years?

3
A person purchases a money back policy at the age of 32 years. He gets Rs. 50000 each at the end of 5, 10, and 15 years as survival benefits and a sum of Rs. 200000 on maturity at the end of 20 years. He invested all these payments at 6% pa. What is the accumulated amount available to him on retirement at the age of 60 years?

4
The cash purchase price of a car is Rs. 200000. A company, however, offers instalment plan where under an immediate payment of Rs. 40000 is to be made and a series of 5 half yearly payments made thereafter. The first instalment is payable after 6 months. If the company wishes to realize a rate of interest of 10% convertible half yearly, calculate the half yearly instalment.

5
Calculate the present value of an immediate annuity payable for 20 years certain at the rate of 15000 pa. The first instalment being due at the end of one year. Assume rate of interest as 7% pa.

6
What would be the PV at a rate of interest of 5% pa of a deferred annuity payable for 10 years certain, the first instalment falling due at the end of 6 years from now. The annuity is payable at the rate of Rs. 100000 pa for the first 5 years and Rs. 200000 for the next 5 years.

7
A sum of Rs. 50000 is invested at a rate of interest of 5% pa. After 7 years, the rate of interest was changed to 5% pa convertible half yearly. After a further period of 3 years, the rate was again changed to 6% pa convertible quarterly. Find the accumulated amount at the end of 15 years from commencement.

8
Find the rate of discount corresponding to a rate of interest of 6% pa.

9
Which yields the higher rate of interest for every Rs. 1000 in a bank or an NSC giving the following maturity values respectively? a) Rs. 1629 after 5 years in a Bank FD b) Rs. 1901 after 6 years in NSC

10
Ms. Ritu deposited a sum of Rs. 2500000 in an annuity certain plan for 25 years providing a yield of 6% pa. What would be the amount of annuity if she wishes to receive annual annuity payments: a) Payable in arrears b) Payable in advance

11
Mr. Vijay got a sum of Rs. 1000000 on retirement. He spends Rs. 100000 on renovation of his house, Rs. 200000 on a new car and keeps Rs. 200000 as reserve for emergencies. The balance amount is invested at 8% pa in a plan allowing withdrawal of Rs. 50000 at the end of each year. How long his money will last in the said plan?

12
Ashok, a middle level executive, aged 45 years saves at 9% pa Rs. 200000 in the beginning of a year for the first 8 years and then stops saving on account of certain financial contingencies. On retirement at the age of 65 years, he intends to keep aside a sum of Rs. 500000 out of the accumulated amount of the above savings as liquid money for emergencies and to invest the balance amount at 6% pa providing withdrawal of a fixed amount at the end of every year for 20 years. Find the amount of annual withdrawals.

13
Under an educational loan, a person receives four annual installments of Rs. 10000 each, the first payment being made at the present moment. The loan is to be repaid in lump sum at the end of 10 years from now along with 6% interest pa. Calculate the amount repayable.

14
An employee aged 25 years is currently spending Rs. 100000 pa. If the rate of inflation is 5% and he wishes to maintain the present standard of living throughout his life. What amount would he be requiring to spend during the first year of his exit from service if the retirement age is a) 55 years b) 58 years c) 60 years d) 65 years

15
Mohan aged 30 years is working in an MNC and wishes to set aside some fixed amount at the beginning of each year towards retirement planning. He is currently spending Rs. 240000 pa and wishes to raise his standard of living by 2% per year until his retirement age at 55 years. The average rate of inflation is expected to be 3% all these years. If he wants to maintain 90% of his standard of living that he would be enjoying on retirement assuming no provision for inflation thereafter, then what is the annual amount of income he should manage for after retirement?

16
In the previous case, if Mohans life expectancy on retirement is 25 years and he wants the same annual income as envisaged in previous case for all the years in advance after retirement. What accumulated amount should he have on retirement for such an arrangement? Assume the discounting rate is 6% pa

17
John aged 42 years working in a software company wants nest eggs amounting to Rs. 5000000 at his retirementage of 65 years. Assume rate of interest 10% p.a. a) How much amount should he save in the beginning of every year until retirement? b) Alternatively, how much amount should he save at the end of every year until retirement?

18
An employee aged 57 years wishes to purchase an annuity certain for 20 years starting from age 60 by paying single premium. Calculate the single premium payable now. The amount of annual annuity payment is Rs. 100000. First instalment is paid at the end of 3 years and remaining at 1 year intervals thereafter. Assume interest to be 7 % pa during the deferment and the annuity payment period.

19
A has invested Rs. 1000 in a savings instrument maturing after 15 years. On its maturity, he receives a sum of Rs. 1750. What rate of interest is realised in this transaction?

20
Ram is aged 32 years and would retire at the age of 60 years. He deposits 8% of his annual salary in his pension account at the end of the year. What will be his annual pension account at the end of the year of retirement. What will be his annual pension amount paid to him at the start of the year on retirement. Rate of interest is 6% pa. Pensions stop when Ram turns 75 years. # Salary will be 450000 between ages 32 to 40 # 550000 between ages 40 to 50 # 600000 between 50 to 60

21
Find PV of an annuity certain that pays 50000 at the end of the year for next 10 years, 70000 for next 10 years and 80000 for the last 10 years. Assume rate of interest to be 6% pa for 20 years and 5% pa for the last 10 years.

22
Meera deposits Rs. 200000 in an account, then starts withdrawing level annual payments starting 1 year after the deposit was made. If immediately after 11th drawing, she has Rs. 40000 left in her account. Find the amount of each cash withdrawal if annual rate of interest is 8%

23
Suppose you have an opportunity to make an investment in a real estate venture that expects to pay investors Rs. 750 at the end of each month for the next eight years. You believe that a reasonable return on your investment should be 17% p.a compounded monthly. # How much should you pay for the investment?

24
Rajat considering the purchase of an apartment for Rs. 100000. They estimate that they will receive Rs. 15000 at the end of each year for the next 10 years. At the end of 10th year, the apartment project will be worth nothing. If Rajat purchases the project, what will be the internal rate of return?

25
Dinesh is considering the purchase of an investment that is expected to generate cash flows of Rs. 15000 per year for the next 5 years. After that, cash flows are expected to increase at the rate of 5% per year for the indefinite future. How much is this investment worth to Dinesh today, if the required return is 15%?

26
Rajat plans to retire in 15 years. After retire Rajat will need Rs. 500000 pa. Rajat thinks he will live 10 years after retirement. Taking interest rate at 8%, how much he will need to accumulate till retirement?

27
Rajat wishes to invest in an ICICI bond that pays interest quarterly. ICICI wish to pay effectively 16% p.a on this bond. Rajat wishes to know the annual percentage rate (APR) on this bond rather than the effective interest rate. What is the APR that corresponds to an effective rate of 16% for this bond?

28
Rajat plans to retire 33 years from now. He expects to live 27 years after retirement. He wants to have enough money upon reaching retirement age to withdraw Rs. 1000000 p.a from the account at the beginning of each year he expects to live, and yet still have Rs. 5000000 left in the account at the time of expected death (60 years from now). He plans to accumulate the retirement fund by making equal annual deposits at the end of each year for the next 33 years. Rajat expects that he will be able to earn 12% p.a till retirement. However, after retirement he expects only to earn 6% p.a on investments. How much Rajat should invest each year to achieve his goal?

29
Rajat wants to set aside an equated monthly amount from today for a family foreign trip costing Rs. 800000 now. A travel company is offering a customized solution for this to Rajat. As per the offer, after 2 years the company will bear the total travel cost at the then prices and Rajat shall have to pay the cost at 60 EMIs, charging nominal interest rate of 10% p.a (compounded monthly), EMI starting from today. Rajat wants to know how much EMI he will have to pay for this arrangement. (Inflation rate is 15% p.a)

30
Rajat (aged 40years with life expectancy 75 years) wants to donate Rs. 200000 (the then value) to an NGO on each of the last 5 birthdays of his life. As a financial planner you advised him to invest a fixed amount on every birthday (starting from his next birthday) in 22 instalments in an 8% p.a yielding investment. What annual amount should he contribute to ensure donation as per his plan?