As an investment advisor, you have been approached by a client called Shyam for advice on some financial matters Shyam is 35 years old and has Rs 200,000 in bank He plans to work for 25 years and retire at the age of 60 His present salary is Rs 400,000 per year Shyam has decided to invest his bank balance and future savings in a balanced mutual fund scheme which he believes will provide a return of 10 percent per year Shyam seeks your help in answering several questions given below In answering these questions, ignore the tax factor Once he retires at the age of 60, he would like to withdraw Rs 600,000 per year for his consumption needs for the following 20 years (his life expectancy is 80 years) Each annual withdrawal will be made at the end of the year and rate of interest will be 10 percent How much should he require at retirement to meet his retirement need How much should Shyam save each year for the next 25 years to be able to withdraw Rs 600,000 per year from the beginning of the 26th year for a period of 20 years Assume that the savings will occur at the end of each year Remember that he already has some bank balance Give the answer to the nearest 000 (6 marks) Suppose Shyam wants to donate Rs 500,000 per year in the last 5 years of his life to a charitable cause Each donation would be made at the beginning of the year Further, he wants to bequeath Rs 4,000,000 to his son at the end of his life How much should he have in his investment account when he reaches the age of 60 to meet this need for donating and bequeathing Approximate it to the nearest 000 (7 marks) Shyam wants to find out the present value of his lifetime salary income Assume that his current salary of Rs 400,000 will be paid annually What is the present value of his life time salary income, if the discount rate applicable to the same is 9 percent (5 marks)

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As an investment advisor, you have been approached by a client called Shyam for advice on some financial matters. Shyam is 35 years old and

As an investment advisor, you have been approached by a client called Shyam for advice on some financial matters. Shyam is 35 years old and has Rs. 200,000 in bank. He plans to work for 25 years and retire at the age of 60. His present salary is Rs. 400,000 per year.

Shyam has decided to invest his bank balance and future savings in a balanced mutual fund scheme which he believes will provide a return of 10 percent per year.

Shyam seeks your help in answering several questions given below. In answering these questions, ignore the tax factor.

Once he retires at the age of 60, he would like to withdraw Rs. 600,000 per year for his consumption needs for the following 20 years (his life expectancy is 80 years). Each annual withdrawal will be made at the end of the year and rate of interest will be 10 percent How much should he require at retirement to meet his retirement need?
How much should Shyam save each year for the next 25 years to be able to withdraw Rs. 600,000 per year from the beginning of the 26th year for a period of 20 years? Assume that the savings will occur at the end of each year. Remember that he already has some bank balance. Give the answer to the nearest 000. (6 marks)
Suppose Shyam wants to donate Rs. 500,000 per year in the last 5 years of his life to a charitable cause. Each donation would be made at the beginning of the year. Further, he wants to bequeath Rs. 4,000,000 to his son at the end of his life. How much should he have in his investment account when he reaches the age of 60 to meet this need for donating and bequeathing? Approximate it to the nearest 000. (7 marks)
Shyam wants to find out the present value of his lifetime salary income. Assume that his current salary of Rs. 400,000 will be paid annually. What is the present value of his life time salary income, if the discount rate applicable to the same is 9 percent?
(5 marks)