The Indian Institute of Financial Planning Page 1TVM Practice Questions

Q.1 Mr. Z aged 50 years has some amount in an annuity which will pay him after 10years Rs.25000 per annum at the beginning of every year for 10 years. Given the rateof interest at 11% p.a, calculate how much amount he has invested now?A. Rs.57469B. Rs.57556C. Rs.52469D. Rs.52143

Q.2 Rajat aged 55 years has some amount in an annuity which will pay him after 5years Rs.30000 per annum at the end of every year for 10 years. Given the rate ofinterest at 9.5% p.a, calculate how much amount he has invested now?A. Rs.135241B. Rs.125689C. Rs.119653D. Rs.124589

Q.3 Shyam is now 48 years old. He is thinking of investing Rs.75000 p.a in anannuity of 10 years which will pay him after another 10 years a certain amount perannum at the beginning of every year for the next 10 years. Assuming the rate ofinterest of 11%, calculate how much he will receive at the beginning of every year?A. Rs.524589B. Rs.521425C. Rs.544750D. Rs.568925

Q.4 Mr.Gopal (aged 50 years) is working in a software company. He investedRs.200000 in a term deposits which enable him to earn a certain amount at thebeginning of each year for 10 years after five years from today. Assuming the rate ofinterest of 9% calculate the amount that Mr.Gopal receive each year?A. Rs.42365B. Rs.42514C. Rs.41245D. Rs.43990The Indian Institute of Financial Planning Page 2

Q.5 Mr. Subramanyam (aged 50 years) is working in a telecom company. Heinvested Rs.200000 in a term deposit which enables him to earn a certain amount at theend of each year for 10 years after five years from today. Assuming the rate of interestof 10.25% calculate the amount that Mr. Subramanyam receive each year?

A. Rs.53589B. Rs.47826C. Rs.48725D. RS.48726

Q.6 You invested some amount in a scheme that starts paying after 10 years,Rs.20000 per year for five years (END) and there after Rs.10000 at the end of eachyear for the next five years. How much you have invested if Return on the investment is10% throughout the term period?A. Rs.41526B. Rs.42145C. Rs.42187D. Rs.38305

Q.7 Mr. Sumit (aged 40 years) is working in a pharma company. He investedRs.300000 in a term deposit which enables him to earn a certain amount at the end ofeach year for 10 years after five years from today. Assuming the rate of interest of11.25% calculate the amount that Mr.Sumit receive each year?A. Rs.75456B. Rs.87720C. Rs.74586D. Rs.76145

Q.8 Anita is 35 years old and wants to know that if she needs to earn an annualincome of Rs.75000, from age 60 to 75 years, in the beginning of each year, then howmuch she needs to invest today? (Assume rate of interest is 9% p.a.)A. Rs.74586B. Rs.76418C. Rs.78455D. Rs.78806The Indian Institute of Financial Planning Page 3

Q.9 Anil is 45 years old and wants to know that if he needs to earn an annual incomeof Rs.82000 for 10 years in the end of each year, after 7 years then how much he needsto invest today? Assume rate of interest is 8.5%.A. Rs.303947B. Rs.326585C. Rs.336589D. Rs.569821

Q.10 You invested some amount in a scheme that starts paying after 10 years,Rs.80000 per year (end) for five years and there after Rs.100000 at the beginning of

each year for the next five years. How much you have invested if Return on theinvestment is 9% throughout the term period?A. Rs.247838B. Rs.274562C. Rs.274560D. Rs.265869

Q.11 Calculate the present value of a deferred annuity which pays Rs.5000 for fiveyears at the end of each year starting ten years from now. The interest rate is 9% p.a.?A. Rs.8500B. Rs.8215C. Rs.9500D. Rs.9561

Q12: Mr. Abhay invested Rs.2500 in a bank FD maturing in 5 years. Calculate the rateof return if the maturity value (inclusive of interest) is Rs.5000?A. 13.45% p.a.B. 14.86% p.a.C. 13.56% p.a.D. 15.65% p.a.

Q13: Mr. Vijay invested Rs.9000 in a deferred annuity plan. The plan offered him areturn of 12% p.a. compounded monthly. Calculate the amount he can withdraw after 5years in the beginning of each month for the next 2 years?A. Rs.762B. Rs.800C. Rs.746D. Rs.850The Indian Institute of Financial Planning Page 4

Q14: Mr. Vinod is planning to buy a car in 6 month’s time. The car he is intending to buywill cost Rs.300000. Calculate the amount he should save every month for the next 6months to accumulate the desired amount, if the rate of interest is 9% p.a. compoundedmonthly?A. Rs.39875B. Rs.50000C. Rs.49070D. Rs.48700

Q15: Mr. Sudhir is planning to buy a car in the next 8 months time. He at present hasRs.100000 in savings account. The car he intends to buy will cost Rs.450000. Calculatethe amount he should save in a debt scheme every month for the next 8 months to

accumulate the desired amount, if the interest rate is 10% p.a. compounded monthly indebt scheme and 3.5% in saving account?A. Rs.41312B. Rs.39024C. Rs.42208D. Rs.35624

Q.16 Mr. Mohan wants to withdraw Rs. 1200/- at the end of each month for the next 5years. He expects to earn 10% interest compounded monthly on his investments. Whatlump sum should he deposit now?(a) Rs. 56949(b) Rs. 58630(c) Rs. 56478(d) Rs. 59119

Q.17 Mr. Amit plans to invest Rs 10000 today for a period of 4 years. If interest rate is10% p.a., how much income per year should he receive to recover his investment?(a) Rs 3155(b) Rs 2500(c) Rs 2800(d) Rs 3000

Q.18 A bank has offered to you an annuity of Rs 1800 for 10 years. If you invest Rs12000/- today the effective rate of return in this case is…..(a) 6.67%(b) 8%(c) 8.15%(d) 8.67%

Q.19 You save Rs 2000 a year for 5 years, and Rs 3000 a year for 10 years thereafter.How much these savings will grow into? Assume a rate of interest of 10%.(a) Rs. 79482.38(b) Rs. 74982.38(c) Rs. 72.948.38(d) None of the above

Q.20 Mr. X receives a PF amount of Rs 1,00,000. He deposits it in a bank which pays10% interest. If he withdraws annually Rs 20,000 for how long he can do so?(a) 6 years(b) 7 years(c) 7.27 years(d) 8 years

Q.21 You want to borrow Rs 15,00,000 to buy a flat. You approach a housing companywhich charges 13% interest. You can pay Rs 2,00,000 per year towards loanamortization. What should be the maturity period of the loan?A) 30.18 yearsB) 29 yearsC) 31 yearsD) None of the above

Q.22 If you deposit Rs. 5000 today at 12% rate of interest, in how many years will thisamount grow to Rs 1,60,000?A) 29.28 yearsB) 30.58 yearsThe Indian Institute of Financial Planning Page 6C) 32 yearsD) None of the above

Q.23 A finance company offers to give Rs 8000 after 12 years in return for Rs 1000deposited today. Figure out the approximate interest offered.A) 18.92%B) 21 %C) 17 %D) None of the above

Q.24 A finance company advertises that it will pay a lump sum of Rs 10000 at the endof 6 years to investors who deposit annually Rs 1000.What interest rate is implicit inthis?A) 22.82 %B) 21.28 %C) 20.28 %D) None of the Above

Q.25 What is the present value of Rs 2,000 receivable annually for 30 years? The firstreceipt occurs after 10 years at the end of the year and the discount rate is 10%.A) 7268.96B) 7862.96C) 7628.96D) None of the above