1.
Mr. A invests Rs.50,000 pa in debt mutual fund which gives 8.5% return pa. Investment will increase at 10% pa. Mr. B is investing Rs.40,000 in the same debt mutual fund along with investing Rs.10,000 in growth oriented equity fund which has return of 11% pa with same growth rate in investment and for the same investment period. The difference between the effective return earned is
Solution:
Mr. A will earn the effective return of 8.5%
For Mr. B will earn the effective return of 8.5%
Hence the difference is 9.06-8.5 = 0.56%
2.
Mr. A took loan on 1st July 2009 of Rs.30 lakh at 10.25% floating rate for 20 years. Bank intimated that his interest rate has increased to 11% with effect from Jan 2011, thus causing an increase in EMI to end loan with same tenure. He negotiated with bank and his interest rate was reduced to 10.5% from March 2011 along with 1% processing fee on sanctioned loan. Calculate absolute amount saved due to refinancing.
| – | LOAN | 1ST JULY | 3000000 | – | – |
| – | – | EMI | $29,449.30 | – | – |
| – | OPENING | INT | EMI | CAP | O/S |
| 1 | 3000000 | 25625 | 29449.3 | 3824 | 2996176 |
| 2 | 2996175.7 | 25592 | 29449.3 | 3857 | 2992319 |
| 3 | 2992318.734 | 25559 | 29449.3 | 3890 | 2988429 |
| 4 | 2988428.823 | 25526 | 29449.3 | 3923 | 2984506 |
| 5 | 2984505.686 | 25493 | 29449.3 | 3957 | 2980549 |
| 6 | 2980549.039 | 25459 | 29449.3 | 3990 | 2976559 |
| 7 | 2976558.595 | 25425 | 29449.3 | 4025 | 2972534 |
| 8 | 2972534.067 | 25390 | 29449.3 | 4059 | 2968475 |
| 9 | 2968475.162 | 25356 | 29449.3 | 4094 | 2964382 |
| 10 | 2964381.587 | 25321 | 29449.3 | 4129 | 2960253 |
| 11 | 2960253.046 | 25285 | 29449.3 | 4164 | 2956089 |
| 12 | 2956089.241 | 25250 | 29449.3 | 4199 | 2951890 |
| 13 | 2951889.87 | 25214 | 29449.3 | 4235 | 2947655 |
| 14 | 2947654.629 | 25178 | 29449.3 | 4271 | 2943383 |
| 15 | 2943383.213 | 25141 | 29449.3 | 4308 | 2939075 |
| 16 | 2939075.311 | 25105 | 29449.3 | 4345 | 2934731 |
| 17 | 2934730.613 | 25067 | 29449.3 | 4382 | 2930349 |
| 18 | 2930348.803 | 25030 | 29449.3 | 4419 | 2925930 |
| – | – | – | – | – | – |
| NEW EMI@11% | $30,896.15 | – | – | – | |
| 1 | 2925930 | 26821 | 30896 | 4075 | 2921854 |
| 2 | 2921854 | 26784 | 30896 | 4112 | 2917742 |
| – | – | – | – | – | – |
| – | – | – | – | PROCESSING | 29177 |
| REVISED EMI@10.5% | $29,934 | – | – | – | |
| – | – | – | – | – | – |
| – | SAVINGS | 963 | 211,775 | – | – |
| – | LESS: PROCESSING | 29,177 | – | – | |
| – | – | NET | 182,598 | – | – |
PVS (Prashant V Shah) 