Ajay and Bela Mehra have two children age 5 and 7.

The Mehra s want to start savin g for their children s education. Each child will spend 6 years at college and wil l begin at age 18. College currently cost Rs.20000 per year per child and is exp ected to increase at 6% p.a. Assuming the Mehra s can earn an annual compound ret urn of 12% and inflation is 4%. How much the Mehra s must deposit at the end of ea ch year to pay for their children s educational requirements until the youngest is out of college. Assume that educational expenses are withdrawn at the beginning of each year and that the last deposit will be made at the beginning of the las t year of the youngest child s college education?

Madhu is in the business of buying houses, fixing them up and reselling them at a profit. She is considering purchasing a house but knows that she has to invest Rs. 2,50,000 at the end of the first month and Rs. 50,000 at the end of 6 month s to restore the house before selling it. She expects to sell the house at the e nd of 18 months for Rs. 17,60,000. If Madhu requires a 25% annual return (Compou nding Monthly) on her investments and there is a 6% real estate brokerage (buy a nd sell each) payable for these transactions, what is the maximum amount she can offer to buy the house?