AAFM GLO_CWM_LVL_1 Exam - Topic 3 Question 51 Discussion

Actual exam question for AAFM's GLO_CWM_LVL_1 exam

Question #: 51
Topic #: 3

Mr. Chopra runs a Garment Factory, he is very concerned about his retirement and wants you to help him out in planning for it. His Current annual expenses are Rs. 12,00,000 which would be rising at an annual rate of 8% pre- retirement and 2% post retirement. His current age is 50 years and he wants to work till the age of 65. The expected life expectancy in his family is 75 years. Calculate the monthly contribution he must make till his retirement if the pre- retirement returns are 12% p.a. compounded monthly and post-retirement returns are 8% pea compounded annually.?

A60973

B59712

C72376

D56320

Show Suggested Answer

Suggested Answer: B

by Gary at Oct 17, 2022, 06:34 PM

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Meghan

4 months ago

Surprised by how much he needs to save, wow!

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Lindy

4 months ago

Totally agree, those numbers add up fast!

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Curt

5 months ago

Wait, how can he afford that with rising expenses?

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Earlean

5 months ago

I think that's a bit high, isn't it?

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Carmela

5 months ago

Looks like he needs to save around 60k a month!

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Marcelle

5 months ago

I feel like I should be able to solve this, but the 8% post-retirement return is throwing me off. I hope I remember the right steps!

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Mignon

5 months ago

I practiced a question where we had to find monthly contributions, but I can't recall if we used the same formula for different compounding frequencies.

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Ruthann

5 months ago

I think the key here is to calculate the future value of expenses first, but I’m a bit confused about how to factor in the different rates for pre and post-retirement.

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Abraham

5 months ago

I remember we did a similar question about retirement planning, but I’m not sure if I got the compounding right for both pre and post-retirement periods.

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Paris

5 months ago

This seems pretty straightforward. I think I'll go with option B to enable Host Group security.

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Caprice

5 months ago

Hmm, I'm a bit unsure about this one. I was thinking the purpose was to determine the magnitude of the risk, so I was leaning towards A - "How big is the risk?". But B also makes sense in terms of evaluating the acceptability of the risk. I'll have to think this through a bit more.

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Fatima

5 months ago

Ah, yes, Graceful Restart! I remember this topic. I'm pretty confident that OSPF and IS-IS support it, but I'm not sure about the other IGPs. I'll mark those two and see if I can eliminate any of the other options.

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