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Ashok is 30 years old and plans to retire after another 25 years, is His annual expenditure is Rs. 2,00,000/-, and wants to maintain the same living standard as of now. Expected inflation rate is 5%. Calculate what will be the Ashok's annual expenditure requirement at the beginning of first year of his retirement?
Suggested Answer: A
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19 comments · newest first
BR
Britt
10 months ago
Wait, are we sure about these numbers? Seems off to me.
MI
Milly
10 months ago
I calculated it too, and I got Rs. 5,72,281/-.
FA
Fannie
11 months ago
Rs. 5,86,326/- is a safe estimate, but inflation is unpredictable!
DA
Dalene
11 months ago
I think it's more like Rs. 6,55,235/-, inflation is tricky!
HE
Heidy
11 months ago
The inflation will really hit hard, Rs. 6,77,270/- sounds about right.
FL
Floyd
11 months ago
I feel like I might have mixed up the inflation rate with the interest rate in my practice. I hope I remember the right formula!
WE
Wendell
12 months ago
I think the answer should be around Rs. 6 lakhs, but I can't recall the exact calculation steps.
SH
Sheldon
12 months ago
This question feels similar to the practice problems we did on retirement planning. I think I need to use the formula for future value of expenses.
MO
Mozell
1 year ago
I remember we calculated future expenses in class, but I'm not sure if I got the inflation adjustment right.
DE
Deonna
1 year ago
This seems tricky, with the inflation rate and long time period. I'll need to work through it step-by-step to make sure I don't miss anything. Might be good to draw out a timeline to visualize the changes over time.
BE
Beatriz
1 year ago
Okay, I think I've got this. I'll need to use the formula FV = PV * (1 + r)^n, where FV is the future value, PV is the present value, r is the annual inflation rate, and n is the number of years. Should be able to plug in the numbers and get the answer.
TA
Tayna
1 year ago
Hmm, not sure I'm following the question fully. I'll need to re-read it carefully and make sure I understand all the variables involved before attempting to solve this.
TU
Tu
1 year ago
This looks like a straightforward compound interest calculation. I'll need to find the future value of the current annual expenditure given the inflation rate and time period.
LA
Lacresha
1 year ago
Hmm, looks like Ashok needs to start saving up for his retirement. I bet he's already stashing away those loose change in his couch cushions.
BO
Bonita
1 year ago
Loose change won't cut it. He needs a plan.
IS
Isadora
1 year ago
Those expenses will balloon fast!
JA
Janna
1 year ago
Agreed! Inflation won't wait for him.
ST
Staci
1 year ago
He really should start a retirement fund.
HO
Hobert
1 year ago
I think the answer is A) Rs. 6,77,270/-