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AAFM GLO_CWM_LVL_1 Exam - Topic 9 Question 21 Discussion

Actual exam question for AAFM's GLO_CWM_LVL_1 exam
Question #: 21
Topic #: 9
[All GLO_CWM_LVL_1 Questions]

Rhona has a daughter Zena five years old. She wants to plan for Zena's education and has found out that she would be requiring 2,75,000 at her age 18 and another 4,50,000 on her age 25. She also wants to have Rs. 10,00,000 for Zena's Marriage which she expects at the age of 28. She wants to deposit the entire amount for these expenses today in an account that pays a ROI of 15% per annum compounded annually. What would this amount be?

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Suggested Answer: D

by Gail at May 07, 2022, 06:06 PM

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Shayne
18 days ago
Definitely going with option C, seems right!
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Mohammad
24 days ago
Wait, how much do you need to invest today?
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Brett
29 days ago
I think the ROI is a bit optimistic at 15%.
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Annamae
1 month ago
}
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Nidia
1 month ago
]
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Page
1 month ago
}
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Maryann
2 months ago
"Candidate 4",
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Josefa
2 months ago
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Billye
2 months ago
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Delisa
2 months ago
"For age 25 (20 years): ≈ 450000 / 1.15^20 ≈ 27k; for marriage at 28 (23 years): ≈ 1,000,000 / 1.15^23 ≈ 40k."
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Maryann
2 months ago
"Candidate 3",
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Lili
3 months ago
{
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Beckie
3 months ago
That's a total of 7,25,000 needed for education and marriage!
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Felix
3 months ago
40174? Really? That seems way too low for all those expenses!
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Delisa
3 months ago
"Sum around 112k; option D. This reminds me of a practice question on funding education with PV of multiple cash flows."
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Marcos
3 months ago
},
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Delisa
4 months ago
"For age 18 (13 years), PV ≈ 275000 / 1.15^13, about 44k."
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Maryann
4 months ago
"Candidate 2",
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Shaun
4 months ago
{
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Gaston
4 months ago
},
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Delisa
4 months ago
"This is a PV of multiple future costs—discount each to today at 15% and sum."
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Maryann
5 months ago
"Candidate 1",
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Charlena
5 months ago
{
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Jennie
5 months ago
[
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Lenita
5 months ago
{
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Rebbecca
5 months ago
I've got a good feeling about this one. Boundary Analysis and Equivalence Partitioning are both common verification techniques, so I'll go with one of those.
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Rikki
5 months ago
Hmm, I'm a bit confused about the differences between SAS and ECS. I'll need to review my notes on the capabilities of each platform before I can confidently answer this.
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Timothy
5 months ago
Okay, this looks like a future value calculation problem. Need to discount each amount back to present value with different time periods.
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