FINANCE

GARIMA SHARMA
JN180270
PGDM(M)

Retirement Plan
Current Cost of Living (Two People) Rs. 50000/month
Date of joining 3/4/2018
Age at the date of joining 21 years
Retirement Age 60 years
Date of Retirement 3/4/2057
Expected Age 70 years
Interest (ROI on Investments) 12%/yearly
Growth rate (Inflation) 5.5%/ yearly
Growth Rate (Salary) 10.00%
No, of Working Years 39 years
Expected Life after Retirement 10 years

 NOW USING LUM SUM TO GET THE FUTURE VALUE OF Current Cost of Living at the
Retirement age.
FV= PV(1+r)n

Future Value of Rs.50000 after 39 years

Using Growth rate (Inflation) 5.50%
Monthly 0.004583
FV 403474.3

VALUE OF Rs. 50000 after 39 years will be Rs. 403474

Corpus Value = Rs.403474

 To calculate PV Of Growing Annuity
PV= A/(i-g) [(1-((1+g)/(1+r)) ^ n]

Year 2057
PV of Cost of Living= Rs. 403474.3
To calculate growing annuity
growth yearly(inflation) 5.5%
growth monthly 0.004583
Interest 12%
Interest monthly 0.010
n 468

Here Growing Annuity will be Rs. 806.9 with growth rate of 10%.