TEST - 1

CURRENT AGE 30, RETIREMENT AGE 60, , LIFE EXPECTANCY 85, PRE-RETIREMENT ROI = 14% P.A.

POST RETIREMENT ROI = 10% P.A., INFLATION = 6% P.A.

Solve the first 9 questions on the basis of above information:

Q1. If current annual expense Rs.300000, how much should be saved in the beginning of every month to
get inflation adjusted expenses during post retirement?

Q2. If the person needs Rs.2 lacs p.m. inflation adjusted during post retirement life how much corpus
would be required at the time of retirement?

Q3. If Annual annuity required Rs.20 lacs inflation adjusted during post retirement life , how much
should be saved in the beginning of every month during pre-retirement life?

Q4. If a person saves Rs.5000 p.m. how much can be withdrawn in the beginning of every month
inflation adjusted during post retirement life if he wants to leave Rs.20 lacs as estate?

Q5. I Can save Rs.4000 pm, can I withdraw Rs.20 lacs p.a. Inflation adjusted? If no how much more I
should save monthly?

Q6. How much I should save in the beginning of every month till retirement. If he would require rs.5 lacs
pm inflation adjusted during post retirement life and wants to leave Rs.20 lacs as estate?

Q7 Standard of living @ 3% p.a. till retirement, CHHE is Rs.20lacs p.a. will require 75% of pre-retirement
expenses inflation adjusted during post retirement, how much he should save in the beginning of every
month?
Q8. Standard of living @ 2% p.a. till life expectancy , CHHE is Rs.5 lacs p.a. will require 85% of pre-
retirement period inflation adjusted during post retirement, he wants to purchase a car of worth current
value 20 lacs at age 70. how much he should save in the beginning of every month during pre-retirement
life?

Q9. If a person saves Rs.50000 p.m. for first 10 years and thereafter 20000 per quarter till retirement,
how much can be withdrawn in the beginning of every month inflation adjusted during post retirement
life if he wants to go to world tour at age 70 which would cost him Rs.50 lacs.

10. Mr. X who is 40 years old spends annually Rs. 7 lakh towards his household expenses. He expects to
retire at 62 years. During this period inflation is expected to be on an average 6% p.a. He wants to cover
35 years’ living expenses for self and spouse. If the inflation in the post-retirement period moderates to
an average of 4% p.a. and he expects to generate a return of 7% from his accumulated corpus, what
corpus should he target for a comfortable retirement?

11. An individual has recently purchased a house worth Rs. 40 lakh for self-occupation by availing
housing loan of Rs. 28 lakh at 9.25% p.a. rate of interest. The tenure of loan is 18 years. Calculate
outstanding balance after 5 years?

12. A 40 year old person spending Rs. 3 lakh p.a. plans to retire at age 63 and expects to live till 75 years.
The basic inflation at 8.75% p.a. He starts investing for retirement at Rs. 30,000 p.a. in a 10% p.a. return
instrument with immediate effect. If the expenses post-retirement are curtailed by 20%, will the annual
saving will be sufficient if not how much he should increase annually?