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An individual has recently purchased a house worth Rs. 40 lakh for self-occupation by availing housing loan of Rs. 28 lakh at 9.25% p.a. rate of interest. The tenure of loan is 18 years. He has Rs. 12 lakh financial assets at present invested at 9% p.a. He is expected to save annually Rs. 2 lakh which he invests on a quarterly basis beginning a quarter from now in an instrument which is expected to provide return of 9% p.a.
1. What will be the EMI on housing loan?
a. 25669
b. 26659
c. 26969
d. 29669
2. What will be the Outstanding in his housing loan after five years?
a. 21,14,624
b. 24,14,624
c. 24,41,624
d. 24,44,624
3. What will be the value of his Financial assets after five years?
a. 14,68,349
b. 16,48,349
c. 16,84,349
d. 18,46,349
4. What will be the value of his Savings after five years?
a. 12,36,614
b. 13,26,614
c. 13,62,614
d. 16,26,614
5. What would be his net worth five years from now? The value of the house which is for consumption purposes is not considered in the net worth so arrived.
a. 6,33,688
b. 6,36,838
c. 6,68,338
d. 6,86,338
Solution :
1 - b
Housing loan liability = 28,00,000
Tenure = 18 years
Rate of interest = 9.25% p.a.
Financial assets = 12,00,000
Annual savings = 2,00,000
Rate of investment growth in assets = 9% p.a.
EMI on housing loan = 26,659 {PMT (9.25%/12,18*12,-2800000,0,0)}
2 - b
Outstanding housing loan = 24,14,624 {PV(9.25%/12,(18-5)*12,-26659,0,0)}
3 - d
Financial assets = 18,46,349 {FV(9%,5,0,-1200000,0)}
4 - a
Savings = 12,36,614 {FV((1+9%)^(1/4)-1,5*4,-200000/4,0,0)}
5 - c
Net worth of the individual after 5 years = 6,68,338 (1846349+1236614-2414624)
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