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Prof raj money is due for retirement in five years time.He plans to raise 5,000,000 by that time which he will use to build a bungalow.He currently earns 400000 per month and wants to know the amount he should set aside from his salary at the end of every year for him to make his plan come to reality.Suppose he deposit the amount set aside annually in an account that attract 12% interest compounded annually
Advice him on the amount he should set annually
Proof to him, as a financial consultant in training, the annual amount will generate the amount he needs to build his bungalow?
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Prof raj money is due for retirement in five years time.He plans to ra...
Calculation of Amount to be Set Aside Annually for Retirement Plan

Given Data:

- Prof Raj Money's retirement is due in 5 years

- He plans to raise 5,000,000 by that time to build a bungalow

- His current monthly earning is 400,000

Calculation:

1. Total amount to be raised in 5 years = 5,000,000

2. Amount to be set aside annually = ?

3. Interest rate = 12% compounded annually

To calculate the amount to be set aside annually, we can use the formula for future value of an annuity:

Future Value of Annuity = A * ((1 + r)^n - 1) / r

Where,
A = Amount to be set aside annually
r = Interest rate
n = Number of years

Substituting the given values, we get:

5,000,000 = A * ((1 + 0.12)^5 - 1) / 0.12

Solving for A, we get:

A = 5,000,000 * 0.12 / ((1 + 0.12)^5 - 1)

A = 734,693.23

Therefore, Prof Raj Money should set aside 734,693.23 annually to raise 5,000,000 in 5 years to build his bungalow.

Conclusion:

Prof Raj Money should set aside 734,693.23 annually from his salary to build his retirement plan of raising 5,000,000 in 5 years to build a bungalow. He should deposit the amount set aside annually in an account that attracts 12% interest compounded annually.
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Prof raj money is due for retirement in five years time.He plans to raise 5,000,000 by that time which he will use to build a bungalow.He currently earns 400000 per month and wants to know the amount he should set aside from his salary at the end of every year for him to make his plan come to reality.Suppose he deposit the amount set aside annually in an account that attract 12% interest compounded annuallyAdvice him on the amount he should set annuallyProof to him, as a financial consultant in training, the annual amount will generate the amount he needs to build his bungalow?
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Prof raj money is due for retirement in five years time.He plans to raise 5,000,000 by that time which he will use to build a bungalow.He currently earns 400000 per month and wants to know the amount he should set aside from his salary at the end of every year for him to make his plan come to reality.Suppose he deposit the amount set aside annually in an account that attract 12% interest compounded annuallyAdvice him on the amount he should set annuallyProof to him, as a financial consultant in training, the annual amount will generate the amount he needs to build his bungalow? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about Prof raj money is due for retirement in five years time.He plans to raise 5,000,000 by that time which he will use to build a bungalow.He currently earns 400000 per month and wants to know the amount he should set aside from his salary at the end of every year for him to make his plan come to reality.Suppose he deposit the amount set aside annually in an account that attract 12% interest compounded annuallyAdvice him on the amount he should set annuallyProof to him, as a financial consultant in training, the annual amount will generate the amount he needs to build his bungalow? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Prof raj money is due for retirement in five years time.He plans to raise 5,000,000 by that time which he will use to build a bungalow.He currently earns 400000 per month and wants to know the amount he should set aside from his salary at the end of every year for him to make his plan come to reality.Suppose he deposit the amount set aside annually in an account that attract 12% interest compounded annuallyAdvice him on the amount he should set annuallyProof to him, as a financial consultant in training, the annual amount will generate the amount he needs to build his bungalow?.
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