SHEEt-1

Mr. X wants to know his profit of various years on the basis of his income and
expenditure for year 2017, 2018, 2019.He can easily do it using a financial
model.
Further details assumed are as follows-

PARTICULAR 2017 2018 2019

REVENUE:
Unit 2000 2500 3000
Price RS.250 RS. 250 RS. 250

Cost of Goods RS. 150 RS. 150 RS.150

Sold
Expenses:
Labour 175000 185000 200000
Marketing 30000 40000 50000
Tax 40% 40% 40%

INTERPRETATION:

First year 2017 there was no profit later in year 2018 profit increased to
rs.15000 and then later in 2018 it got doubled to Rs. 30000.
Therefore financial statement made it easy for Mr. X to know his profit during
various years and therefore due to this he got the idea of continuing this
business in just few minutes.

SHEET-2
Mr. X wants to buy a car of rs.1800000. Down payment made by him was of rs.
250000. Remaining rs.1550000 will be paid by him by taking loan from bank.
Further details are as follows:-

Principal amount Rs.1550000

Rate of Interest 8%
No. Of years 6
No. Of Instalment 72
Now he wants to know the amount of interest in various instalment paid by
him.

INTERPRETATION:-
Thus by using IPMT and PPMT function:
He was able to know his interest in each annuity and he observed that as time
passes interest goes on decreasing and principle amt in particular annuity goes
on increasing and PMT function made it easy for him to calculate the amount
of annuity per month.

SHEET-3
Now as shown in sheet 2 Mr. X has to pay Rs.27176 monthly installement and
assuming he can’t afford this thus he wants it to be Rs.15000.

INTERPRETATION:-
Therefore to solve this problem he used goal seek analysis. What if analysis
which made it possible for him to pay Rs.15000 per month but this increased
the number of years to 14 which made it possible for him to pay Rs. 15000 for
next 14 years.

SHEET-4
Mr. X wants the safety of his family thus he saves Rs.10250 every month in an
LIC policy. He will be doing so, for next 15 years @10%
Now he wants to know what he will get after 15 years.

INTERPRETATION:-

Using future value function Mr. X was able to know the amount which he will
be getting after 15 years. Thus he will be getting Rs.4248321 approx.
Also if Mr. X wanted to know the amount of annuity which he has to pay to get
Rs.4248321 after 15 years. So he would have used PMT function for the same.