Profit

Divident
Retained
Chapter -3
Assignment
Profit Margin
Return on Equity
Average collection
Inventory turn over
Total Assets turnover
Acid test
Debt to Total Assts ratio
Time interest earned
P/E
Divindend yield ratio
Earning per share
Quest - Cash Budget

Ques-2
PV of 1 Cash flow
PV of 2 Cash flow
PV of 3 Cash flow
PV of 3 Cash flow

Now they found another opportunity, where they invest $1000000 for next 5yrs $250,000
PV of 1 Cash flow
PV of 2 Cash flow
PV of 3 Cash flow
PV of 4 Cash flow
PV of 5 Cash flow

Question - Ex 4
Store price -
Option to buy
Annual cash flow from retail operation

Years
Sold at
If the Rate was 20%,

Mr A invest 250,000
Rate - 10%

Year
0
1
2
3

Rate - 10%
Outflow of present value

1
2
3
Contribution Margin
Rev - VC

Break even = TC = TR

Number
FC/CM per unit

How many
No. of units
Customer number needed

Question
VC = 300
Rev = 1000
FC = 1000000

No. of Cust

Q2:
b) earn $250,000 operating income
8913.04347826087

Q3:
How much revenue
a) Revenue needed
CMR = CM/sales
Revenue needed = FC/CMR
1,428,571

b) If Target profit = (FC+TP)/CMR

2,142,857

Q4
Avergae Rev =
FC =
VC =
Target profit =

a) Revenue needed =

b)
No. of haircuts = FC/CM per unit
To obtain 80,000
=( FC+TP)/CM per unit
4000

Q5: BEP is 30 units per month. Your sales is 50 units per month. Industry average = 70%. Are
= BEP/ Sales
= (Sales-BEP)/Sales
0.4

Q6: Sales -
Fixed Exp
CM per unit

Solution =

Q7:
To Solve the Question:
Step 1: Determine Variable Cost per Unit

Highest Cost: $24,000 at 6,000 units

Lowest Cost: $18,000 at 3,000 units

Variable Cost (VC) is calculated using the formula:

VC = Change in Total Cost/Change in Activity Level

Change in Total Cost = $24,000 - $18,000 = $6,000

Change in Activity Level = 6,000 units - 3,000 units = 3,000 units

VC=6,0003,000=2 per unitVC=3,0006,000​=2per unit

Step 2: Determine Fixed Cost

Total Cost Formula:

Total Cost=Fixed Cost+(Variable Cost×Number of Units)
Using the highest cost:

24,000=Fixed Cost+(2×6,000)24,000=Fixed Cost+(2×6,000)

Calculating:

24,000=Fixed Cost+12,00024,000=Fixed Cost+12,000Fixed Cost=24,000−12,000=12,000Fi

Q
Operting Leverage = Contribution / Operating Profits or EBIT
DOL = % change in profit/ % change in Sales

Financial Leverage
Degree of FL =

Composite Lev =

Q Sales
VC
FC

Debt
Int

Operating Lev =

Finacial Lev =

Composit Lev =

Present value ($115,000 × 6.6231)

Sale of store ($2,000,000 × .07276)
615560.5
73000
688560.5
-700000

15-Nov-24

Bond
LTD
Pref Shares
common shares
 22-Nov

Amount

Annual Receipts / Payment x Disc

Factor

If company borrows 300,000 for 4years @ 12%. What would the annual loan payment be?
300,000
4yrs
10%

3.1699
94,640

Q:Calc annual payment, Finance cost and principal repayments on 300,000 @ 10%, 4 years.

300,000
4yrs
10%

PV of annuity
Annual Payment

Q:Calc annual payment, Finance cost and principal repayments on 650,000 @ 12%, 10 years.

650,000
10yrs
12%

PV of annuity
Annual Payment
APR

30,000

Lease
Years
1
2
3
4

Buy

Years
1
2
3
4
Q:Omni
Lease
Years
1
2
3
4

Buy
Years
Cash Inflow
Term Deposits 11,000
TP 3,000
Other cr liability 8,000

22,000

Cash Outflow
Inv (22,000)
TR (8,000)

Notes (12,000)

(42,000)

Profit - Dividend = Retained Earnings

38000
-10000
28000

Revenue 35,000
Depreciation 10,000
Inc in adj in non-cash (5,000)

CF from Oper 40,000

Purchare of equ (110,000)

CF from Investing (110,000)

Long term borrowing 50,000

Purchase of investment (20,000)
contri from cash endow 50,000

CF from Financing 80,000

Net increase/decrease in Cash 10,000

Cash at the end 30,000

Cash at the beginning 20,000

Nov
 25,000

Jan
Sales 75,000
Balance 12,000
Receipt
Cash @20% 15,000
After 30days @60% 30,000
After 60days @20% 5,000
Total reciept 50,000
Total available cash 62,000

Purchase 37,500
Payments
Paid after 30days 25,000
Expenses 26,800
Tax
Purchase of Equip 24,000
Total Paid 75,800

Cash available at the end (13,800)

Jun
Sales 99,000
Balance
Receipt
Cash 14,000
Credit 85,000
same month @70% 59,500
After 30days @30%
Total reciept 73,500
Total available cash 73,500

Purchase 45,000
Payments
Paid in same @60% 27,000
Paid next month @40%
S&A Expenses 14,000
Dividend
Loan
Purchase of Comp
 Total Paid 41,000

Cash available at the end 32,500

Loan
Excess of loan over Cash 23,700
Less: Repay - Int (9%/12 x 26000)
Repay principle
Ending Cash balance

430
2280
0.105263157894737

1080
121.666666666667

100
10
-30
-15

Present value of Investment

50000 0.88
300000 0.77
250000 0.68
400000 0.59
PV of Future Cash flow

NPV

ortunity, where they invest $1000000 for next 5yrs $250,000

Present value of Investment

250000 0.88
250000 1.65
250000 2.32
250000 2.91
250000 3.43
PV of Future Cash flow

NPV

700000
700000 14%
115000

20
2000000

Otflow of present value

Cash Flow:

Annual (115000@14% for 20Yrs)

One time (14% in year 20)

PV of Cash inflows
NPV

Payback
Outflow/ Annual Inflow
6.0870
Profitibality Index

Total inflow/Outlfow 1.30

Outflow of present value

Cash Flow:

Annual (115000@20% for 20Yrs)

One time (2Mi @20% in year 20)

PV of Cash inflows
NPV

Payback
Outflow/ Annual Inflow 6.0870

Profitibality Index

Total inflow/Outlfow 0.87

(250,000)
50,000
100,000
200,000

50,000 0.91
100,000 0.83
200,000 0.75

NPV 2
 CMR
Contri / Sales Amount

Amount
FC/CM Ratio

How much
what is the revenue need
sales revenue req

CM = 700

=FC/CM perunit
1,428.57

0.7

50
 40,000
20
90,000

= (FC+TP)/CMR
216,667

h. Your sales is 50 units per month. Industry average = 70%. Are you doing better or worse than indutr

1600000
480000
80

Step 1: Calculate the Break-even Point in Sales Dollars

Contribution Margin Ratio = Contribution Margin per Unit / Sales Price per Unit

Sales Price per Unit = Total Sales / Total Units = 1,600,000/8,000 =200
Contribution Margin per Unit = $80
Contribution Margin Ratio = 80/200=0.4 or 40%

Break-even Point (BEP) in Sales Dollars = Fixed Expenses / Contribution Margin Ratio

BEP = 480,000/0.4 =1,200,000

Step 2: Calculate the Margin of Safety

Margin of Safety = Total Sales - Break-even Sales

Margin of Safety = 1,600,000−1,200,000 = 400,000
le Cost per Unit

000 units
000 units

ated using the formula:

hange in Activity Level

4,000 - $18,000 = $6,000

= 6,000 units - 3,000 units = 3,000 units

C=3,0006,000​=2per unit

able Cost×Number of Units)

0)24,000=Fixed Cost+(2×6,000)

4,000=Fixed Cost+12,000Fixed Cost=24,000−12,000=12,000Fixed Cost=24,000−12,000=12,000

ution / Operating Profits or EBIT

change in Sales

= Sales - VC - FC/ Sales - VC - FC - Interest

= % changes in EPS / % change in EBIT
= EBIT / (EBIT -1 / EBT)

OP * FL
% change in EPS / % changes in Sales

1000000
700000
 200000

500000
10% 50,000

= Contribution / Operating Profits or EBIT

= (1000000-700000) / (1000000-700000-200000)
3.00

= Sales - VC - FC/ Sales - VC - FC - Interest

= (1000000-700000-200000)/ (1000000-700000-200000- 50,000)
2.00

= OP * FL
=3x2
6.00

value ($115,000 × 6.6231) 761,657

tore ($2,000,000 × .07276) 145,520

50000
50000
50000
50000
 10,000
12%
4

($30,373.49)

= PV of Future Cashflow / Borrowing

for 4years @ 12%. What would the annual loan payment be?
650,000
10yrs
12%

5.6502
115,040

nce cost and principal repayments on 300,000 @ 10%, 4 years.

Yrs
1
2
3
3.1699 4
94,640

nce cost and principal repayments on 650,000 @ 12%, 10 years.

Yrs
1
2
3
5.6502 4
115,040 5
6
7
 8
9
10

FOR 4 MONTHS
55% 700

16,500

90,000
Annual Pay Interest
90,000 -
90,000 -
90,000 -
90,000 -

500,000 12% and 4 yrs

Loan Amount / Disc factor Balance x Int
Annual Pay Interest
$164,619.89 60,000
$164,619.89 47,446
$164,619.89 33,385
$164,619.89 17,649
 Which is better ? Lease

Annual Pay Interest

2600
2600
4600
4600

12% 4Yrs 3

Annual Pay Interest

3292.3978533566 1,200
3292.3978533566 949
3292.3978533566 668
3292.3978533566 353
(20,000)

Inc in Non-cash WC = Dec in Cash flow

IT
Microsoft Amazon Novarties
Google Walmart Pfizer

Dec
 50,000

Feb March Apr

120,000 140,000 110,000
(13,800) (2,100) 26,100

24,000 28,000 22,000

45,000 72,000 84,000
10,000 15,000 24,000
79,000 115,000 130,000
65,200 112,900 156,100

60,000 70,000 55,000

37,500 60,000 70,000

26,800 26,800 26,800
3000

67,300 86,800 96,800

(2,100) 26,100 59,300

July Aug
105,000 104,000
25,000 43,700

25,000 32,000
80,000 72,000
56,000 50,400
25,500 24,000
106,500 106,400
131,500 150,100

43,000 40,000

25,800 24,000
18,000 17,200
14,000 14,000
30,000

3000
 87,800 58,200

43,700 91,900

195
23,505
20,000

850000 Present value of Investment

43,860 PV of 1 Cash flow

230,850 PV of 2 Cash flow
168,750 PV of 3 Cash flow
236,840 PV of 3 Cash flow
680,300

(169,700)
1,000,000

219,300
411,675
580,400
728,425
858,275
2,798,075

1,798,075

700000

761,657
145,600

907,257
207,257
 700000

560,004
52,200

612,204
(87,796)

Rate - 16%
250000 Outflow of present value

45,455 1
82,640 2
150,260 3
278,355

28,355
 CMR = 0.6

r worse than indutry?

on Margin Ratio
12,000=12,000
 7%
9%
7%
11%
Annual Pay Interest Principle
94640 30,000 64,640
94640 23,536 71,104
94640 16,426 78,214
94640 8,604 86,042

Annual Pay Interest Principle

115,040 78,000 37,040
115,040 73,555 41,485
115,040 68,577 46,463
115,040 63,001 52,039
115,040 56,757 58,283
115,040 49,763 65,277
115,040 41,929 73,111
 115,040 33,156 81,884
115,040 23,330 91,710
115,040 12,325 102,707

0.000033 43800

Tax sheild After tax cost

36000 54,000 2600
36000 54,000 2600
36000 54,000 4600
36000 54,000 4600
216,000

(Int + CC) x Tax rate Annual - Tax Shield

CCA Tax shield After tax cost
250000 124,000 40,620
250000 118,978 45,642
13,354 151,266
7,060 157,560
 395,088

Tax sheild After tax cost

910 1,690
910 1,690
1610 2,990
1610 2,990
9,360
10,000
3,292.40
CCA Tax shield After tax cost
2500 1,295 1,997
2500 1,207 2,085
2500 1,109 2,184
2500 998 2,294
8,560
 Cash Flow

Profit after Tax 38,000

Add: Depreciation 15,000

Operating Activities:

Change in working capital (20,000)

CF from Oper 33,000

Investing Activities
PPE (75,000)

CF from Investing (75,000)

Financing Actitivities
Share 26,000
Long term 18,000
Dividend (10,000)

CF from Financing 34,000

Net increase/decrease in Cash (8,000)

Cash at the end 15,000

Cash at the beginning 7,000

Q2
-cash WC = Dec in Cash flow Profit 3500
Inc in A/C (4,000)
Inc in A/P 5,500
Dep 500
 CF from Oper 5,500

Equipment (5,000)

CF from Investing (5,000)

CF from Financing -

Net increase/decrease in Cash 500

Cash at the end 6,000

Cash at the beginning 5,500

QUICK RATIO
2022
Citi group Boeing 0.32
Wells fargo Airbus 0.59
Expenses
Salaries 22,000
Telephone 1,000
Rent 2,200
Hydro 1,100
Stationary 500
26,800
alue of Investment 900,000

500000 438,600
500000 384,750
100000 67,500
-
PV of Future Cash flow 890,850

NPV (9,150)
present value 250000

50,000 0.86 43,105

100,000 0.74 74,320
200,000 0.64 128,140
245,565

NPV 1 (4,435)
 300,000
Remaining
235,360
164,256
86,042
-

650,000
Remaining
612,960
571,475
525,012
472,972.85
414,689
349,412
276,301
 194,417
102,707
-

910 1,690
910 1,690
1610 2,990
1610 2,990
9,360

Annual Pay - Int Buy amount - Principle

Principle Balance
$104,619.89 395,380
$117,174.28 278,206
$131,235.19 146,971
146,971 -
 $500,000.00

Principle Balance
2,092 7,908
2,343 5,564
2,625 2,939
2,940 (0)
 Assets increase Outflow

Investing

Q3
Profit 25000
Dep 9,000
Inc in A/C (3,600)
Inc in Inventory (600)
Prepaid exp 9,500
Accrued Payable -1000
Acc liab 2000
 CF from Oper 40,300

Equipment (6,000)

CF from Investing (6,000)

Inc in Shares 1,000

CF from Financing 1,000

Net increase/decrease in Cash 35,300

Cash at the end 84,000 35,300

Cash at the beginning 48,700

QUICK RATIO Debt to Assets

2023 2022 2023
0.28 42.70% 39.50%
0.56 11% 11.40%
Home buying process
Select a Real Estate Agent
The Agent shows you houses based on your criteria
You like a house - then you make an offer
IF offer is accepted by seller - then it is binding
the offer will include any condition including a closing date
An Initial deposit is made to the seller's agent - this initial deposit is part of down paymen
the home buyer has to arrange financing for the $900,000
the home buyer can meet a mortgage agent
The agent take mortgage application and all supporting doc.
The agent is able to arrange a mortgage for this buyer
On the background - the buyer also connects with a real estate lawyer.
The lawyer will search the records of the property to ensure it is free and clear
If no issue with the title search, then a closing date is set
On or before the closing date - the lender wilres the loan amount to the buyer 's attorney'
On the closing date - Attroney ensure all papers are signed , then approprite amounts are
Buyer gets the key

Easement - rights acquired for the benefit of property or granting to another property
Servient tenement Land giving the right
Dominant Tenement Land receiveing the right

A special type of easement is called statutory rights of way

Usually given to public utility companies

Restricted covennat - restrictions on title of the servient tenement for the benefit of domina

Fee Simple Own the land - have most rights

Leasehold Does not own the land on which structure exist
Value 500,000
rate 3%
years 25
5
12
12

(₹2,371.06)
(₹14,285.84)

Payment Begin Payment

1 500,000.00 2,371.06
2 497,628.94 2,365.13
3 495,263.81 2,359.22
4 492,904.60 2,353.32
5 490,551.28 2,347.43
6 488,203.85 2,341.57
7 485,862.28 2,335.71
8 483,526.57 2,329.87
9 481,196.69 2,324.05
10 478,872.65 2,318.24
11 476,554.41 2,312.44
12 474,241.97 2,306.66
13 471,935.30 2,300.89
14 469,634.41 2,295.14
15 467,339.27 2,289.40
16 465,049.86 2,283.68
17 462,766.18 2,277.97
18 460,488.21 2,272.28
19 458,215.93 2,266.60
20 455,949.33 2,260.93
21 453,688.40 2,255.28
22 451,433.13 2,249.64
23 449,183.49 2,244.02
24 446,939.47 2,238.41
25 444,701.07 2,232.81
26 442,468.26 2,227.23
27 440,241.03 2,221.66
28 438,019.37 2,216.10
29 435,803.27 2,210.56
30 433,592.70 2,205.04
31 431,387.66 2,199.53
32 429,188.14 2,194.03
33 426,994.11 2,188.54
34 424,805.57 2,183.07
35 422,622.50 2,177.61
36 420,444.89 2,172.17
37 418,272.72 2,166.74
38 416,105.98 2,161.32
39 413,944.66 2,155.92
40 411,788.74 2,150.53
41 409,638.21 2,145.15
42 407,493.06 2,139.79
43 405,353.27 2,134.44
44 403,218.83 2,129.10
45 401,089.73 2,123.78
46 398,965.94 2,118.47
47 396,847.47 2,113.18
48 394,734.30 2,107.89
49 392,626.41 2,102.62
50 390,523.78 2,097.37
51 388,426.42 2,092.12
52 386,334.29 2,086.89
53 384,247.40 2,081.68
54 382,165.73 2,076.47
55 380,089.26 2,071.28
56 378,017.98 2,066.10
57 375,951.88 2,060.94
58 373,890.94 2,055.78
59 371,835.16 2,050.64
60 369,784.51 2,045.52
61 367,738.99 2,040.40
62 365,698.59 2,035.30
63 363,663.29 2,030.21
64 361,633.07 2,025.14
65 359,607.93 2,020.08
66 357,587.86 2,015.03
67 355,572.83 2,009.99
68 353,562.84 2,004.96
69 351,557.88 1,999.95
70 349,557.93 1,994.95
71 347,562.97 1,989.96
72 345,573.01 1,984.99
73 343,588.02 1,980.03
74 341,607.99 1,975.08
75 339,632.92 1,970.14
 76 337,662.78 1,965.21
77 335,697.57 1,960.30
78 333,737.26 1,955.40
79 331,781.87 1,950.51
80 329,831.35 1,945.63
81 327,885.72 1,940.77
82 325,944.95 1,935.92
83 324,009.03 1,931.08
84 322,077.95 1,926.25
85 320,151.70 1,921.44
86 318,230.26 1,916.63
87 316,313.63 1,911.84
88 314,401.79 1,907.06
89 312,494.73 1,902.29
90 310,592.44 1,897.54
91 308,694.90 1,892.79
92 306,802.10 1,888.06
93 304,914.04 1,883.34
94 303,030.70 1,878.63
95 301,152.07 1,873.94
96 299,278.13 1,869.25
97 297,408.88 1,864.58
98 295,544.30 1,859.92
99 293,684.38 1,855.27
100 291,829.11 1,850.63
101 289,978.49 1,846.00
102 288,132.48 1,841.39
103 286,291.10 1,836.78
104 284,454.31 1,832.19
105 282,622.12 1,827.61
106 280,794.51 1,823.04
107 278,971.46 1,818.49
108 277,152.98 1,813.94
109 275,339.04 1,809.40
110 273,529.64 1,804.88
111 271,724.75 1,800.37
112 269,924.39 1,795.87
113 268,128.52 1,791.38
114 266,337.14 1,786.90
115 264,550.24 1,782.43
116 262,767.81 1,777.98
117 260,989.83 1,773.53
118 259,216.30 1,769.10
119 257,447.20 1,764.67
120 255,682.53 1,760.26
121 253,922.27 1,755.86
122 252,166.40 1,751.47
123 250,414.93 1,747.09
124 248,667.84 1,742.73
125 246,925.11 1,738.37
126 245,186.74 1,734.02
127 243,452.72 1,729.69
128 241,723.03 1,725.36
129 239,997.67 1,721.05
130 238,276.62 1,716.75
131 236,559.87 1,712.46
132 234,847.41 1,708.18
133 233,139.24 1,703.90
134 231,435.33 1,699.64
135 229,735.69 1,695.40
136 228,040.29 1,691.16
137 226,349.13 1,686.93
138 224,662.20 1,682.71
139 222,979.49 1,678.51
140 221,300.99 1,674.31
141 219,626.68 1,670.12
142 217,956.56 1,665.95
143 216,290.61 1,661.78
144 214,628.82 1,657.63
145 212,971.20 1,653.48
146 211,317.71 1,649.35
147 209,668.36 1,645.23
148 208,023.13 1,641.11
149 206,382.02 1,637.01
150 204,745.01 1,632.92
151 203,112.09 1,628.84
152 201,483.25 1,624.76
153 199,858.49 1,620.70
154 198,237.78 1,616.65
155 196,621.13 1,612.61
156 195,008.52 1,608.58
157 193,399.94 1,604.56
158 191,795.39 1,600.55
159 190,194.84 1,596.54
160 188,598.30 1,592.55
161 187,005.75 1,588.57
162 185,417.18 1,584.60
163 183,832.58 1,580.64
164 182,251.94 1,576.69
165 180,675.25 1,572.74
166 179,102.51 1,568.81
167 177,533.69 1,564.89
168 175,968.80 1,560.98
169 174,407.83 1,557.08
170 172,850.75 1,553.18
171 171,297.57 1,549.30
172 169,748.27 1,545.43
173 168,202.84 1,541.56
174 166,661.27 1,537.71
175 165,123.56 1,533.87
176 163,589.70 1,530.03
177 162,059.67 1,526.21
178 160,533.46 1,522.39
179 159,011.07 1,518.58
180 157,492.49 1,514.79
181 155,977.70 1,511.00
182 154,466.70 1,507.22
183 152,959.48 1,503.46
184 151,456.02 1,499.70
185 149,956.32 1,495.95
186 148,460.38 1,492.21
187 146,968.17 1,488.48
188 145,479.69 1,484.76
189 143,994.94 1,481.04
190 142,513.89 1,477.34
191 141,036.55 1,473.65
192 139,562.90 1,469.96
193 138,092.94 1,466.29
194 136,626.65 1,462.62
195 135,164.03 1,458.97
196 133,705.06 1,455.32
197 132,249.74 1,451.68
198 130,798.06 1,448.05
199 129,350.01 1,444.43
200 127,905.58 1,440.82
201 126,464.76 1,437.22
202 125,027.54 1,433.63
203 123,593.91 1,430.04
204 122,163.87 1,426.47
205 120,737.41 1,422.90
206 119,314.51 1,419.34
207 117,895.16 1,415.79
208 116,479.37 1,412.25
209 115,067.11 1,408.72
210 113,658.39 1,405.20
211 112,253.19 1,401.69
212 110,851.50 1,398.19
213 109,453.31 1,394.69
214 108,058.62 1,391.20
215 106,667.42 1,387.73
216 105,279.69 1,384.26
217 103,895.44 1,380.80
218 102,514.64 1,377.34
219 101,137.30 1,373.90
220 99,763.40 1,370.47
221 98,392.93 1,367.04
222 97,025.90 1,363.62
223 95,662.27 1,360.21
224 94,302.06 1,356.81
225 92,945.25 1,353.42
226 91,591.83 1,350.04
227 90,241.79 1,346.66
228 88,895.13 1,343.29
229 87,551.84 1,339.94
230 86,211.90 1,336.59
231 84,875.32 1,333.24
232 83,542.07 1,329.91
233 82,212.16 1,326.59
234 80,885.57 1,323.27
235 79,562.30 1,319.96
236 78,242.34 1,316.66
237 76,925.68 1,313.37
238 75,612.31 1,310.09
239 74,302.22 1,306.81
240 72,995.41 1,303.55
241 71,691.86 1,300.29
242 70,391.58 1,297.04
243 69,094.54 1,293.79
244 67,800.75 1,290.56
245 66,510.19 1,287.33
246 65,222.86 1,284.11
247 63,938.74 1,280.90
248 62,657.84 1,277.70
249 61,380.14 1,274.51
250 60,105.63 1,271.32
251 58,834.31 1,268.14
252 57,566.17 1,264.97
253 56,301.20 1,261.81
254 55,039.39 1,258.66
255 53,780.73 1,255.51
256 52,525.22 1,252.37
257 51,272.85 1,249.24
258 50,023.62 1,246.12
259 48,777.50 1,243.00
260 47,534.50 1,239.89
261 46,294.61 1,236.79
262 45,057.81 1,233.70
263 43,824.11 1,230.62
264 42,593.50 1,227.54
265 41,365.96 1,224.47
266 40,141.48 1,221.41
267 38,920.07 1,218.36
268 37,701.72 1,215.31
269 36,486.41 1,212.27
270 35,274.13 1,209.24
271 34,064.89 1,206.22
272 32,858.67 1,203.20
273 31,655.47 1,200.20
274 30,455.27 1,197.19
275 29,258.08 1,194.20
276 28,063.88 1,191.22
277 26,872.66 1,188.24
278 25,684.42 1,185.27
279 24,499.16 1,182.30
280 23,316.85 1,179.35
281 22,137.50 1,176.40
282 20,961.10 1,173.46
283 19,787.64 1,170.53
284 18,617.12 1,167.60
285 17,449.52 1,164.68
286 16,284.84 1,161.77
287 15,123.07 1,158.86
288 13,964.20 1,155.97
289 12,808.24 1,153.08
290 11,655.16 1,150.19
 291 10,504.97 1,147.32
292 9,357.65 1,144.45
293 8,213.20 1,141.59
294 7,071.61 1,138.74
295 5,932.87 1,135.89
296 4,796.98 1,133.05
297 3,663.93 1,130.22
298 2,533.72 1,127.39
299 1,406.33 1,124.57
300 281.75 1,121.76

23-Sep
Mortgage (loan) amount $ 400,000.00
Interest rate 6%
Amortisation period / Time period to pay-off the l 25 years
Frequency of payment Monthly

The period of time when the interest rate is fixed is called

Payment - monthly -$2,577.21

bi-weekly (₹1,188.79)

Loan Line of credit

₹50,000.00 ₹50,000.00
Advance ₹50,000.00 up to you
Pay on Whole 50000 Whatever amount you withdraw
rate fixed variable

Took loan for 500,000 mortange 2 yrs ago, 6% and term for 5 years. The rate has come down
Loan balance now is 475,000. what the penalty could be?

3 month's interest 475000 x 6%/4

Interest rate differential 475,000 x (6% - 4%) x 3

Monthly payment ₹1,000.00

Option 1: Make one pay of 1,000 each month

Option 2: send 250 each week - because 1000/4
Option 3: 1000 x 12 / 52 = ₹230.77

Default Insurance required if LTV is more than 80%

Title insurance required by lender - protects against title
mortgage life isnurance protects the borrowers benficiary
Critical illness and disability
Term insurance
home insurance

4-Nov

Rushni is thinking to p[urchase a condo. The usual condo fee in the area where she is looking
the condo fee includes heating bill but exculded property tax of 1200 per year. She has car lo
of $350,credit card payment of $300. additionally she contributes $400/ month into her RRSP
Her weekly gross income is $1270
s part of down payment

OUR JOB

ee and clear

o the buyer 's attorney's trust account

approprite amounts are written in cheques

another property

or the benefit of dominat tenemaent

 300

Int Principle ending

1,250.00 1,121.06 497,628.94
1,244.07 1,121.06 495,263.81
1,238.16 1,121.06 492,904.60
1,232.26 1,121.06 490,551.28
1,226.38 1,121.06 488,203.85
1,220.51 1,121.06 485,862.28
1,214.66 1,121.06 483,526.57
1,208.82 1,121.06 481,196.69
1,202.99 1,121.06 478,872.65
1,197.18 1,121.06 476,554.41
1,191.39 1,121.06 474,241.97
1,185.60 1,121.06 471,935.30
1,179.84 1,121.06 469,634.41
1,174.09 1,121.06 467,339.27
1,168.35 1,121.06 465,049.86
1,162.62 1,121.06 462,766.18
1,156.92 1,121.06 460,488.21
1,151.22 1,121.06 458,215.93
1,145.54 1,121.06 455,949.33
1,139.87 1,121.06 453,688.40
1,134.22 1,121.06 451,433.13
1,128.58 1,121.06 449,183.49
1,122.96 1,121.06 446,939.47
1,117.35 1,121.06 444,701.07
1,111.75 1,121.06 442,468.26
1,106.17 1,121.06 440,241.03
1,100.60 1,121.06 438,019.37
1,095.05 1,121.06 435,803.27
1,089.51 1,121.06 433,592.70
1,083.98 1,121.06 431,387.66
1,078.47 1,121.06 429,188.14
1,072.97 1,121.06 426,994.11
1,067.49 1,121.06 424,805.57
1,062.01 1,121.06 422,622.50
1,056.56 1,121.06 420,444.89
1,051.11 1,121.06 418,272.72
1,045.68 1,121.06 416,105.98
1,040.26 1,121.06 413,944.66
1,034.86 1,121.06 411,788.74
1,029.47 1,121.06 409,638.21
1,024.10 1,121.06 407,493.06
1,018.73 1,121.06 405,353.27
1,013.38 1,121.06 403,218.83
1,008.05 1,121.06 401,089.73
1,002.72 1,121.06 398,965.94
997.41 1,121.06 396,847.47
992.12 1,121.06 394,734.30
986.84 1,121.06 392,626.41
981.57 1,121.06 390,523.78
976.31 1,121.06 388,426.42
971.07 1,121.06 386,334.29
965.84 1,121.06 384,247.40
960.62 1,121.06 382,165.73
955.41 1,121.06 380,089.26
950.22 1,121.06 378,017.98
945.04 1,121.06 375,951.88
939.88 1,121.06 373,890.94
934.73 1,121.06 371,835.16
929.59 1,121.06 369,784.51
924.46 1,121.06 367,738.99
919.35 1,121.06 365,698.59
914.25 1,121.06 363,663.29
909.16 1,121.06 361,633.07
904.08 1,121.06 359,607.93
899.02 1,121.06 357,587.86
893.97 1,121.06 355,572.83
888.93 1,121.06 353,562.84
883.91 1,121.06 351,557.88
878.89 1,121.06 349,557.93
873.89 1,121.06 347,562.97
868.91 1,121.06 345,573.01
863.93 1,121.06 343,588.02
858.97 1,121.06 341,607.99
854.02 1,121.06 339,632.92
849.08 1,121.06 337,662.78
844.16 1,121.06 335,697.57
839.24 1,121.06 333,737.26
834.34 1,121.06 331,781.87
829.45 1,121.06 329,831.35
824.58 1,121.06 327,885.72
819.71 1,121.06 325,944.95
814.86 1,121.06 324,009.03
810.02 1,121.06 322,077.95
805.19 1,121.06 320,151.70
800.38 1,121.06 318,230.26
795.58 1,121.06 316,313.63
790.78 1,121.06 314,401.79
786.00 1,121.06 312,494.73
781.24 1,121.06 310,592.44
776.48 1,121.06 308,694.90
771.74 1,121.06 306,802.10
767.01 1,121.06 304,914.04
762.29 1,121.06 303,030.70
757.58 1,121.06 301,152.07
752.88 1,121.06 299,278.13
748.20 1,121.06 297,408.88
743.52 1,121.06 295,544.30
738.86 1,121.06 293,684.38
734.21 1,121.06 291,829.11
729.57 1,121.06 289,978.49
724.95 1,121.06 288,132.48
720.33 1,121.06 286,291.10
715.73 1,121.06 284,454.31
711.14 1,121.06 282,622.12
706.56 1,121.06 280,794.51
701.99 1,121.06 278,971.46
697.43 1,121.06 277,152.98
692.88 1,121.06 275,339.04
688.35 1,121.06 273,529.64
683.82 1,121.06 271,724.75
679.31 1,121.06 269,924.39
674.81 1,121.06 268,128.52
670.32 1,121.06 266,337.14
665.84 1,121.06 264,550.24
661.38 1,121.06 262,767.81
656.92 1,121.06 260,989.83
652.47 1,121.06 259,216.30
648.04 1,121.06 257,447.20
643.62 1,121.06 255,682.53
639.21 1,121.06 253,922.27
634.81 1,121.06 252,166.40
630.42 1,121.06 250,414.93
626.04 1,121.06 248,667.84
621.67 1,121.06 246,925.11
617.31 1,121.06 245,186.74
612.97 1,121.06 243,452.72
608.63 1,121.06 241,723.03
604.31 1,121.06 239,997.67
599.99 1,121.06 238,276.62
595.69 1,121.06 236,559.87
591.40 1,121.06 234,847.41
587.12 1,121.06 233,139.24
582.85 1,121.06 231,435.33
578.59 1,121.06 229,735.69
574.34 1,121.06 228,040.29
570.10 1,121.06 226,349.13
565.87 1,121.06 224,662.20
561.66 1,121.06 222,979.49
557.45 1,121.06 221,300.99
553.25 1,121.06 219,626.68
549.07 1,121.06 217,956.56
544.89 1,121.06 216,290.61
540.73 1,121.06 214,628.82
536.57 1,121.06 212,971.20
532.43 1,121.06 211,317.71
528.29 1,121.06 209,668.36
524.17 1,121.06 208,023.13
520.06 1,121.06 206,382.02
515.96 1,121.06 204,745.01
511.86 1,121.06 203,112.09
507.78 1,121.06 201,483.25
503.71 1,121.06 199,858.49
499.65 1,121.06 198,237.78
495.59 1,121.06 196,621.13
491.55 1,121.06 195,008.52
487.52 1,121.06 193,399.94
483.50 1,121.06 191,795.39
479.49 1,121.06 190,194.84
475.49 1,121.06 188,598.30
471.50 1,121.06 187,005.75
467.51 1,121.06 185,417.18
463.54 1,121.06 183,832.58
459.58 1,121.06 182,251.94
455.63 1,121.06 180,675.25
451.69 1,121.06 179,102.51
447.76 1,121.06 177,533.69
443.83 1,121.06 175,968.80
439.92 1,121.06 174,407.83
436.02 1,121.06 172,850.75
432.13 1,121.06 171,297.57
428.24 1,121.06 169,748.27
424.37 1,121.06 168,202.84
420.51 1,121.06 166,661.27
416.65 1,121.06 165,123.56
412.81 1,121.06 163,589.70
408.97 1,121.06 162,059.67
405.15 1,121.06 160,533.46
401.33 1,121.06 159,011.07
397.53 1,121.06 157,492.49
393.73 1,121.06 155,977.70
389.94 1,121.06 154,466.70
386.17 1,121.06 152,959.48
382.40 1,121.06 151,456.02
378.64 1,121.06 149,956.32
374.89 1,121.06 148,460.38
371.15 1,121.06 146,968.17
367.42 1,121.06 145,479.69
363.70 1,121.06 143,994.94
359.99 1,121.06 142,513.89
356.28 1,121.06 141,036.55
352.59 1,121.06 139,562.90
348.91 1,121.06 138,092.94
345.23 1,121.06 136,626.65
341.57 1,121.06 135,164.03
337.91 1,121.06 133,705.06
334.26 1,121.06 132,249.74
330.62 1,121.06 130,798.06
327.00 1,121.06 129,350.01
323.38 1,121.06 127,905.58
319.76 1,121.06 126,464.76
316.16 1,121.06 125,027.54
312.57 1,121.06 123,593.91
308.98 1,121.06 122,163.87
305.41 1,121.06 120,737.41
301.84 1,121.06 119,314.51
298.29 1,121.06 117,895.16
294.74 1,121.06 116,479.37
291.20 1,121.06 115,067.11
287.67 1,121.06 113,658.39
284.15 1,121.06 112,253.19
280.63 1,121.06 110,851.50
277.13 1,121.06 109,453.31
273.63 1,121.06 108,058.62
270.15 1,121.06 106,667.42
266.67 1,121.06 105,279.69
263.20 1,121.06 103,895.44
259.74 1,121.06 102,514.64
256.29 1,121.06 101,137.30
252.84 1,121.06 99,763.40
249.41 1,121.06 98,392.93
245.98 1,121.06 97,025.90
242.56 1,121.06 95,662.27
239.16 1,121.06 94,302.06
235.76 1,121.06 92,945.25
232.36 1,121.06 91,591.83
228.98 1,121.06 90,241.79
225.60 1,121.06 88,895.13
222.24 1,121.06 87,551.84
218.88 1,121.06 86,211.90
215.53 1,121.06 84,875.32
212.19 1,121.06 83,542.07
208.86 1,121.06 82,212.16
205.53 1,121.06 80,885.57
202.21 1,121.06 79,562.30
198.91 1,121.06 78,242.34
195.61 1,121.06 76,925.68
192.31 1,121.06 75,612.31
189.03 1,121.06 74,302.22
185.76 1,121.06 72,995.41
182.49 1,121.06 71,691.86
179.23 1,121.06 70,391.58
175.98 1,121.06 69,094.54
172.74 1,121.06 67,800.75
169.50 1,121.06 66,510.19
166.28 1,121.06 65,222.86
163.06 1,121.06 63,938.74
159.85 1,121.06 62,657.84
156.64 1,121.06 61,380.14
153.45 1,121.06 60,105.63
150.26 1,121.06 58,834.31
147.09 1,121.06 57,566.17
143.92 1,121.06 56,301.20
140.75 1,121.06 55,039.39
137.60 1,121.06 53,780.73
134.45 1,121.06 52,525.22
131.31 1,121.06 51,272.85
128.18 1,121.06 50,023.62
125.06 1,121.06 48,777.50
121.94 1,121.06 47,534.50
118.84 1,121.06 46,294.61
115.74 1,121.06 45,057.81
112.64 1,121.06 43,824.11
109.56 1,121.06 42,593.50
106.48 1,121.06 41,365.96
103.41 1,121.06 40,141.48
100.35 1,121.06 38,920.07
97.30 1,121.06 37,701.72
94.25 1,121.06 36,486.41
91.22 1,121.06 35,274.13
88.19 1,121.06 34,064.89
85.16 1,121.06 32,858.67
82.15 1,121.06 31,655.47
79.14 1,121.06 30,455.27
76.14 1,121.06 29,258.08
73.15 1,121.06 28,063.88
70.16 1,121.06 26,872.66
67.18 1,121.06 25,684.42
64.21 1,121.06 24,499.16
61.25 1,121.06 23,316.85
58.29 1,121.06 22,137.50
55.34 1,121.06 20,961.10
52.40 1,121.06 19,787.64
49.47 1,121.06 18,617.12
46.54 1,121.06 17,449.52
43.62 1,121.06 16,284.84
40.71 1,121.06 15,123.07
37.81 1,121.06 13,964.20
34.91 1,121.06 12,808.24
32.02 1,121.06 11,655.16
29.14 1,121.06 10,504.97
 26.26 1,121.06 9,357.65
23.39 1,121.06 8,213.20
20.53 1,121.06 7,071.61
17.68 1,121.06 5,932.87
14.83 1,121.06 4,796.98
11.99 1,121.06 3,663.93
9.16 1,121.06 2,533.72
6.33 1,121.06 1,406.33
3.52 1,121.06 281.75
0.70 1,121.06 (840.01)

Term

bi-weekly (₹1,189.48)
Accelarated bi-w (₹1,288.60)

u withdraw

he rate has come down to 4% now.

7125
28500
ea where she is looking is $500.
per year. She has car loan payment of
0/ month into her RRSP .
Initial Investment = 1000
0

FUTURE Value

FV = PV (1+r)^n

Excel formula using FV

FV = PV x factor from table = 1000 x 1.15763

PV = ???
0

PRESENT Value

PV = 5000 /(1+5%)^3

Excel formula using PV

FV = PV x factor from table = 5000 x 0.86384

Recurring Payment of $500

FV of annuity = pmx x (1+ r)^t - 1)/r

Excel Fn
FV of annuity = pmt x factor from table = 500 x 3.1525
 500
0

FV of annuity = pmt x (1+ r)^t - 1)/r x (1+r)

Excel Fn
FV of annuity = pmt x factor from table x (1 +Interest rate) = 500 x 3.1525 x (1 + 5%

500
0

Value at the end of YR 3

FV Formula

2nd way

Value at the end of YR 3

FV Formula

Excel fn

Question 1:

Option 1
Receive 13,500 each year for 10yrs from end of the year
Formula
FV

Option 2
Receive 17500 after 10 yrs

Question 2:
Purchase a house 5yrs from today. Average house value is $500,000. to
increase by 4% a year. You intend to make 10% down payment. Currently,
you have $35000 of savings. What yearly amt you need to invest, so that
you have enough to make the down payment?
Assumptions:
1. you are making the investment at the end of the year
2. you will earn 6% in your investment

House value
Downpayment
Money needed

Amount

Q3:
Borrowed $50,000. Int rate 8%, pay in 5 years. What will be the payment
Option 1
Pay together at the end of the term
Amount after 5 year

Option 2)
pay interest each yr and then payback the principle

Option 3)
pay interest and principle each yr so that no loan at the end of the term

Question
You are meeting a client this morning about retirement planning.
In the meeting the client tells you that she wish to retire when she turns 60 yrs old.
After they retire, they would like to have enough fund available that will provide
for the client's yearly estimated expenses of $25,000 per year for the next 20 years.
The client has existing savings of $30,000.
How much yearly investment the client needs to make to meet her goal?

The following additional information is available

1) The client is 35 years old today
2) Any yearly investment till retirement will occur at the end of each year
3) Any investment until retirement will earn 6% annually
4) After retiring, the yearly expense will be withdrawn at the beginning of each year
5) The amount inside the investment account will earn a 4% annualy after retirement
Step 1 to find PV
PV
 ₹353,348.48
Then FV of today's 30000
FV
PMT

amount needed
Installment

Using Table
PV of annuity

FV of existing savings = PV x Factor

FV of annuity = C x factor
224,583.00
4,094

Chapter 2

Annual Int - 12%. It is calculated Quarterly.

If u invest 5000/year for next 10 years and earn 4% annual return. How much will y
Assume you invest at the end of each year

After 10 years =

If u invest 5000/year for next 10 years and earn 4% annual return. How much will y
You will increase your deposit by 2% each year
Assume you invest at the end of each year

FVCGA

Q
Value
rate
years
 (₹2,365.14)

Question:
You are meeting a client this morning about retirement planning.
In the meeting the client tells you that she wish to retire when she turns 60 yrs old.
After they retire, they would like to have enough fund available that will provide
for the client's yearly estimated expenses of $15,000 per year for the next 20 years.

Q: How much yearly investment the client needs to make to meet her goal?

The following additional information is available

1) The client is 40 years old today
2) Any yearly investment till retirement will occur at the beginning of each year
3) Any investment until retirement will earn 5% annually
4) After retiring, the yearly expense will be withdrawn at the end of each year
5) The amount inside the investment account will earn a 4% annually after retirement

Step 1 to find PV
Present value of $15,000 withdraw each year for 20 years after the client turns 40

This $203,854.50 is the future value of investments from today to next 20 years and is
equivalent to the future value due as the investmment starts today.

Step 2: Future Value of an Annuity Due (FVAD)

Thus, $203,854.50
203,854.50
Yearly deposits

Question:
Sam owns a house whose mkt value is $550,000 and has a mortgage balance of $350,000.
He pays $1,500 mortgage payment. Assume 60% of payment goes towards paying interest.
His propertay tax is $1,200/ year paid semi-annually at June and December.
Same also owns a car he had purchased five years ago for $22,000. Recenty he tried to sell it
The car has a of $8,000 of outstanding with a monthly pmt of $400 (50% is interest)
Sam has a credit card with balance of $5,000.

He also has the following expenditures during the year

Gasoline
Utilities
Clothing
Entertainment
Furniture
Vacation
groceries

Prepare a Balace Sheet (use only relevant information)

Sam's Fam
Balance she
As of December 3
Assets
House
Car

Total Assets

Net worth

Class exercise- 1Oct

You had a meeting with Sara, a new client, and came to know the following information for th

Sara's weekly gross income from her employer is $1,800. Her income tax rate is 20%.
Sara has $12,000 in a savings account that has a 4% annual interest rate that deposits intere
She also has $5,000 in her chequing account.
She owns 2,000 shares of ABC Corp in a unregistered account. The share has a history of pay
The current market value of the ABC Corp. share is $21/share.
Sara owns a house whose mkt value is $410,000 and has a mortgage balance of $290,000.
She pays $1,400 monthly mortgage payment. (Assume 60% of payment goes towards paying inte
The propertay tax is $1,200/ year paid in January, April, July and October.
Sara owns a car she had purchased five years ago for $22,000. Recenty she tried to sell it and
The car has a of $4,000 of outstanding loan with a monthly pmt of $300 (50% is interest)

Sara also has the following expenditures during the year

Sara expects to receive $1,800 back as tax refund once she files her tax in April.
Also, her car requires a maintenance in May which will require $500.
She is also expecting a raise of 3% in her pay from her employer starting from April 1, 2025.

Assume this is Janaury 1, 2025.

Prepare a cash budget for the first 6 months of 2025 to check how much cash woul
available for investment at the end of each month.

Sara's Family
Balance sheet
As of June 30, 20XX

Savings accounts

Income
Tax Payment
Interest Income
Dividend
Tax Back refund
Cash Payment
Mortgage Payment
Interest on Mortgage
Car loan pay plus Interest
Gasoline
Utilities
Clothing
Entertainment
Groceries
Property tax
Car Maintenanec
Vacation
Total Payment
Net Cash

Cash ending balance

Emergency fund
Cash available for Invest

Exercise
You had a meeting with Sara, a new client, and came to know the following information for th

Sara's bi-weekly gross income from her employer is $3,200. Her income tax rate is 20%.
Sara has $18,000 in a savings account that has a 4% annual interest rate that deposits intere
She also has $5,000 in her chequing account.
She owns 2,500 shares of ABC Corp in a unregistered account. The share has a history of pay
The current market value of the ABC Corp. share is $21/share.
Sara owns a house whose mkt value is $410,000 and has a mortgage balance of $290,000.
She pays $1,400 monthly mortgage payment. (Assume 60% of payment goes towards paying inte
The propertay tax is $1,200/ year paid in January, April, July and October.
Sara owns a car she had purchased five years ago for $22,000. Recenty she tried to sell it and
The car has a of $4,000 of outstanding loan with a monthly pmt of $300 (50% is interest)
Credit card balance of $6,000.

Sara also has the following expenditures during the year

Prepare a personal income statement for 2024 using the format of slide # 16 of Ch 4 (unde

All sorces of Income

Revenue
Salary
Less:Tax not paid
+ Tax refunds
Interst Income
Dividend Income
Net revenue

Less: Expenses
Mortgage Int pay
Car Loan Int pay
Gasoline
Utilities
Clothing
Entertainment
Groceries
Property tax

Net Income

Less: Non-disc expenditures

Mortgage principle pay
Car Loan principle pay
Discretionary Cash flow

Less: Discretionary Exp

Furniture
Vacation
Total Discretionary Exp

Net Cash Flow

8th Oct

Sandy died leaving her spouse Sam and 3 kids - Bob, Tine and Sara.
She left 1.2mil (assume all fees have been deducted)

How much will each living member receive)

SAM
Bob
Tine
Sara

26-Nov-24

Employment Income
Interest
Dividend
Capital Gain
Total Income
Deductions
Taxabke Income

Total Income
- Deduction
= Net income
- some other adjustments
= taxable income
Calculate tax on this taxable income
deduct any tax you already paid
Apply tax credit
Pay balance or get refund
Q:
You were meeting a client to show the difference in investment income.
Show after-tax income of receiving $1,000 as interest income, dividend income and capital ga
Assume the client's marginal tax rate is 30%.
Also, assume the dividend is from an eligible canadian corporation.

1. Interest Income:

Taxable Income=$1,000
Tax Owed=30%×$1,000=$300
After-Tax Income=$1,000−$300=$700
2. Dividend Income:

Grossed-up Amount:

Grossed-up Amount=$1,000×(1+0.38)=$1,380

Federal Tax on Grossed-up Amount:

Federal Tax=30%×$1,380=$414

Dividend Tax Credit (Federal):

DTC=15.02%×$1,380=$207.28DTC=15.02%×$1,380=$207.28

Net Tax:

Net Tax=$414−$207.28=$206.72Net Tax=$414−$207.28=$206.72

After-Tax Income:

After-Tax Income=$1,000−$206.72=$793.28After-Tax Income=$1,000−$206.72=$793.28

3. Capital Gains:

Taxable Portion:

Taxable Capital Gain=50%×$1,000=$500Taxable Capital Gain=50%×$1,000=$500

Tax Owed:
Tax Owed=30%×$500=$150Tax Owed=30%×$500=$150

After-Tax Income:

After-Tax Income=$1,000−$150=$850After-Tax Income=$1,000−$150=$850

Summary of After-Tax Incomes:

Interest Income: $700

Dividend Income: $793.28
Capital Gains: $850
 Interest 5%

1 2

1,157.63

1,157.63
1,157.63

Interest 5%

1 2

4,319.19

(4,319.19)
4,319.20

500 500
1 2

1,576.25

₹1,576.25
1,576.25
 500 500
1 2

1,655.06

₹1,655.06
1,655.06

6%
500 500
1 2

Ordinary Annuity Initial Investment

1,591.80 595.51
₹1,591.80 ₹595.51

Annuity due Ending Investment

1,687.31 500.00
₹1,687.31 500.00

₹2,187.31

177,940.80
(₹177,940.73)

17,500.00
Method 1 Method 2
₹608,326.45 ₹608,326.45
60,832.65 60,832.65
25,832.65 ₹46,837.90
13,994.75
(₹19,100.43) (₹2,482.66)

(₹62,614.11) (₹12,614.11)
(₹12,522.82)
 (₹128,756.12) ₹128,756.12
(₹2,346.80)

₹224,592.36
(₹4,093.58)

c x factor x (1+rate)
353,340.00

128,757.00

= C x 54.860

0.1255
12.55%

ow much will you have at the end of 10years?

60,050.00 (₹60,030.54)

ow much will you have at the end of 10years?

500,000
3%
25.00
tirement

lient turns 40 years old.

= C x factor
= 15,000 x Future value annuity factor from TVM Table
= 15000 x 13.5903
203,854.50
ars and is

= yearly deposits x Future value annuity factor from TVM Table x ( 1+ rate)
= yearly deposits x 33.066 x 1.05
5,871.50

34.719

of $350,000.
aying interest.
he tried to sell it and received only for an offer for $12,000.

100
200
300
200
1000
2000
200

Sam's Family
Balance sheet
s of December 31, 20XX
Liabilities
550,000 Current Liability
12,000 Mortgage Payment
Car Loan
Credit card balance

Long-term liabilities
Mortgage Balance
Credit card balance
Car Loan Balance
562,000 Total Liabilities

190,300
 formation for the year 2024.

t deposits interest monthly.

a history of paying $0.25 / share dividend quarterly.

e of $290,000.
wards paying interest. )

ried to sell it and only for an offer for $8,000.

is interest)

Gasoline
Utilities
Clothing
Entertainment
Furniture
Vacation (in December)
Groceries

m April 1, 2025.

uch cash would be

5,000.00 8,480.00

Jan Feb
7800 7800
(1,560) (1,560)
40 40
 6,280 6,280

1,400 1,400

300 300
100 100
200 200
100 100
200 200
200 200
300

2,800 2,500
3,480 3,780

8,480.00 12,260.00

formation for the year 2024.

ate is 20%.
t deposits interest monthly.

a history of paying $0.25 / share dividend quarterly.

e of $290,000.
wards paying interest. )

ried to sell it and only for an offer for $8,000.

is interest)

Gasoline
Utilities
Clothing
Entertainment
Furniture
 Vacation (in December)
Groceries

16 of Ch 4 (under Sep 24 class)

83,200
(16,640)
2,000
720
2,500

1,400 10,080
300 1,800
100 1,200
200 2,400
300 1,200
200 2,400
200 2,400
1,200

1,400 6,720
300 1,800

1,000
2,000
 333,333.33 666,666.67
222,222.22
222,222.22
222,222.22

60,000.00
500.00 500
500.00 690.00
500.00 250.00
61,440
5,000
56,440

Sara
Income 60,000
RRSP contri 0
Taxable income 60,000
Tax rate 20%
Tax 12000

110,000.00
53,359.00
53,358.00
3,283.00
me and capital gain income.

Type Interest
Income received 1000
Taxable income 1000
Marginal tax rate 30%
Tax amount 300
Tax credit @ 15.02% of Dividend 0
Tax liability 300
After tax income 700

Type Interest
Income received 1000
Taxable income 1000
Marginal tax rate 30%
Tax amount 300
Tax credit @ 9.03% of Dividend 0
Tax liability 300
After tax income 700

6.72=$793.28
 FV = ????
3

Ending value = 5000

3

500 Ordinary Annuity = ???

3
 Annuity due = ???
3

500
3

2,187.31 595 1591

2,187.31

2,187.31
2,187.31
 608050

42350

16,933.65
If semi-annually

0.030225
3%
 (₹14,285.84)

1.030225
1.7990406586691
1.00248451672465
0.2485%

able x ( 1+ rate)
 monthly
monthly
quaterly
monthly
yearly
yearly
monthly

Liabilities

1,500
8,000
250 = 5000 x 5%

iabilities
349,400 = 350000- (1500*60% = 900) then other 600 deduct from principle
4,750 = 5000 - 250
7,800 = 8000 - 200 (400*50%)
371,700
 100 monthly
200 monthly
300 quaterly
200 monthly
1000 yearly
2000 yearly
200 monthly

12,260.00 16,540.00 22,007.20

Mar Apr May

7800 8034 8034
(1,560) (1,607) (1,607)
40 40 40
500
1,800
 6,780 8,267 6,467

1,400 1,400 1,400

300 300 300

100 100 100
200 200 200
100 100 100
200 200 200
200 200 200
300
500

2,500 2,800 3,000

4,280 5,467 3,467

16,540.00 22,007.20 25,474.40

15000 15000 15000

100 monthly
200 monthly
300 quaterly
200 monthly
1000 yearly
 2000 yearly
200 monthly

71,780

22,680

8,520

3,000

37,580
 Eligible 38%
Non-eligible 15%
Foreign same as interest

Susy
60,000
5000
55,000
20%
11000

8,003.85 15%
10,938.39 20.50%
853.58 26%
19,795.82
Dividend Capital Gain
1000 1000
1380 500
30% 30%
414 150
207.276 0
206.724 150
793.276 850

Dividend Capital Gain

1000 1000
1150 500
30% 30%
345 150
103.845 0
241.155 150
758.845 850
en other 600 deduct from principle
 25,474.40 29,941.60 33,608.80 37,576.00 42,043.20

June July August September October

8034 8034 8034 8034 8034
(1,607) (1,607) (1,607) (1,607) (1,607)
40 40 40 40 40
500 500
 6,967 6,467 6,467 6,967 6,467

1,400 1,400 1,400 1,400 1,400

300 300 300 300 300

100 100 100 100 100
200 200 200 200 200
100 100 100 100 100
200 200 200 200 200
200 200 200 200 200
300 300

2,500 2,800 2,500 2,500 2,800

4,467 3,667 3,967 4,467 3,667

29,941.60 33,608.80 37,576.00 42,043.20 45,710.40

15000 15,000.00 15000 15000 15000
 45,710.40 49,677.60

November December
8034 8034
(1,607) (1,607)
40 40
500
 6,467 6,967

1,400 1,400

300 300
100 100
200 200
100 100
200 200
200 200

2,000
2,500 4,500
3,967 2,467

49,677.60 52,144.80
15000 15000
 168
1%
380000 = deposits for 168 mos @ 6%
= C x (1 +r)n -1
1900 = C x (1.05)^168 - 1

($878,379.06)

($508,535.24)
600000
$91,464.76

($346.96)

($46,856.90)