Basic Excel Functions_Problems

7/28/2019 Basic Excel Functions_Problems

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Basic Excel Functions-

Problems


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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?


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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?


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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 himon retirement at the age of 60 years?


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4

The cash purchase price of a car is Rs.200000. A company, however, offersinstalment plan where under an immediate

payment of Rs. 40000 is to be made and aseries of 5 half yearly payments madethereafter. The first instalment is payableafter 6 months. If the company wishes to

realize a rate of interest of 10% convertiblehalf yearly, calculate the half yearlyinstalment.


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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.


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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 fromcommencement.


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8

Find the rate of discount corresponding to a

rate of interest of 6% pa.


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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


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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


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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 eachyear. How long his money will last in the said

plan?


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12

Ashok, a middle level executive, aged 45 years savesat 9% pa Rs. 200000 in the beginning of a year forthe first 8 years and then stops saving on account ofcertain financial contingencies. On retirement at theage of 65 years, he intends to keep aside a sum ofRs. 500000 out of the accumulated amount of theabove savings as liquid money for emergencies andto invest the balance amount at 6% pa providing

withdrawal of a fixed amount at the end of everyyear for 20 years. Find the amount of annualwithdrawals.


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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.


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14

An employee aged 25 years is currently spending Rs.100000 pa. If the rate of inflation is 5% and hewishes to maintain the present standard of livingthroughout his life. What amount would he berequiring to spend during the first year of his exitfrom service if the retirement age is

a) 55 years

b) 58 years

c) 60 years

d) 65 years


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15

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


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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 advanceafter retirement. What accumulated amount

should he have on retirement for such an

arrangement? Assume the discounting rate is6% pa


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17

John aged 42 years working in a softwarecompany wants nest eggs amounting toRs. 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 hesave at the end of every year untilretirement?


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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 annualannuity 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 paymentperiod.


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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 thistransaction?


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20

Ram is aged 32 years and would retire at the age of60 years. He deposits 8% of his annual salary in hispension account at the end of the year. What will behis annual pension account at the end of the year of

retirement. What will be his annual pension amountpaid to him at the start of the year on retirement.Rate of interest is 6% pa. Pensions stop when Ramturns 75 years.

# Salary will be 450000 between ages 32 to 40

# 550000 between ages 40 to 50# 600000 between 50 to 60


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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 be6% pa for 20 years and 5% pa for the last 10

years.


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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%


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23

Suppose you have an opportunity to make aninvestment in a real estate venture that expectsto pay investors Rs. 750 at the end of each

month for the next eight years. You believe thata reasonable return on your investment shouldbe 17% p.a compounded monthly.

# How much should you pay for the investment?


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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 10thyear, the apartment project will be worth

nothing. If Rajat purchases the project, what

will be the internal rate of return?


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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 toincrease at the rate of 5% per year for the

indefinite future. How much is this investment

worth to Dinesh today, if the required return is15%?


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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 toaccumulate till retirement?


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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% forthis bond?


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28

Rajat plans to retire 33 years from now. He expects to live 27years after retirement. He wants to have enough money uponreaching retirement age to withdraw Rs. 1000000 p.a from theaccount at the beginning of each year he expects to live, andyet still have Rs. 5000000 left in the account at the time of

expected death (60 years from now). He plans to accumulatethe retirement fund by making equal annual deposits at theend of each year for the next 33 years. Rajat expects that hewill be able to earn 12% p.a till retirement. However, afterretirement he expects only to earn 6% p.a on investments.How much Rajat should invest each year to achieve his goal?


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29

Rajat wants to set aside an equated monthlyamount from today for a family foreign tripcosting Rs. 800000 now. A travel company isoffering a customized solution for this to Rajat.

As per the offer, after 2 years the company willbear the total travel cost at the then prices andRajat 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 haveto pay for this arrangement. (Inflation rate is 15%p.a)


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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 planneryou advised him to invest a fixed amount on

every birthday (starting from his next

birthday) in 22 instalments in an 8% p.ayielding investment. What annual amount

should he contribute to ensure donation as

per his plan?

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Basic Excel Functions_Problems