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AAFM GLO_CWM_LVL_1 Exam - Topic 3 Question 51 Discussion

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.?
B) 59712
A) 60973
C) 72376
D) 56320

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
[All GLO_CWM_LVL_1 Questions]

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.?

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Suggested Answer: B

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

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Meghan
10 months ago
Surprised by how much he needs to save, wow!
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Lindy
10 months ago
Totally agree, those numbers add up fast!
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Curt
11 months ago
Wait, how can he afford that with rising expenses?
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Earlean
11 months ago
I think that's a bit high, isn't it?
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Carmela
11 months ago
Looks like he needs to save around 60k a month!
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Marcelle
11 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
11 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
11 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
11 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
11 months ago
This seems pretty straightforward. I think I'll go with option B to enable Host Group security.
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Caprice
11 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
11 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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