Samplequestionson

RetirementPlanning&EmployeesBenefits

PARTI(OBJECTIVE)
SECTION1
251=25Marks
Choosemostappropriateanswerfromthealternativesgiven.Eachquestioncarries1mark.

1. InWhichyearofopeningtheaccountcanthesubscribertoaPPFtakefirstloan?
a) Seventhyear
b) Fourthyear
c) Immediately
d) Thirdyear

2.

Intheeventofdeathofanminorsubscriber,thebalanceofPPFaccountispayableto
whom?
a) Theguardian
b) Legalheirsoftheminor
c) Father
d) Mother
e) Noneoftheabove

3.

MinimumAdministrativechargesEmployerhastopaytowardsEPS1995is____________.
a) Rs.5
b) Rs.3
c) Rs.2
d) NIL

4.

SalaryforthepurposeofEDLIwillinclude:
a) Basic+D.A.
b) Basic+D.A.+RetainingAllowance
c) Basic+D.A.+RetainingAllowance+Cashvalueoffoodconcessions.
d) Basic+D.A.(formingpartofretirementbenefit)+Fixed%ofcommission.

5.

6.

Whatistheminimumnumberofemployeesinanestablishmentforittocomeunderthe
purviewoftheGratuityAct1972?
a) 20orabove20
b) Above20
c) 10orabove10
d) Above10
IopenmyPPFaccounton142007.Whenitwillmature?
a) 01042024
b) 31032024
c) 01042023
d) 01042025

7.

Minimum how many years membership is required to take the advance from PF for
constructionofhouseundertheEPFAct,1952?
a) 10yearsmembership
b) 7yearsmembership
c) 5yearsmembership
d) 3yearsmembership

8.

WhatistheminimumamountunderEDLIscheme?
a) Rs.45000
b) Rs.60000
c) Rs.35000
d) Rs.35000+25%oftheamountinexcessofbalanceinPF

9.

TheminimummonthlyinstallmentwithwhichapostofficeRDaccountcanbeopenedis
Rs.___andinmultiplesofRs.____.
a) 100,10
b) 500,10
c) 100,5
d) 10,5

10. Ifinflationrateis4.9%andtaxrateis30%.Therequiredrateofreturntomaintainthe
valueofaninvestmentis______.
a) 16.33%
b) 7%
c) 5%
d) Noneoftheabove
11. Mr. Y aged 30 spends Rs.100000 p.a. to maintain his standard of living. He wishes to
increases his standard of living 2% every year till retirement. What amount will be
requiredbyhimatage60ifinflationrateis5.5%p.a.?
a) Rs.498395.13
b) Rs.875495.52
c) Rs.181136.16
d) Noneoftheabove
12. WhatisthecontributionofGovernmentinGeneraProvidentFund?
a) 12%ofBasicSalary
b) 6%ofBasicSalary
c) 10%ofBasicSalary
d) NIL

13. Whatistheinterestratep.a.earnedbyaninvestoronKVP?
a) 8%
b) 8.25%
c) 8.41%
d) Noneoftheabove

14. ApersonhastakenaloanofRs.1lacatROIis12%p.a.for5years.WhathisEMIwill
be?
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a)
b)
c)
d)

2202.42
27741
2224.44
Noneoftheabove

15. Mrs.&Mr.Sharmaareaged55and58yearsrespectively.Bothexpecttoworktillthey
turn65.Theironlygoalistofundtheirretirement.Whichofthefollowingislikelytobe
anappropriateassetallocationstrategyforthem?
a) 20%Sectoralequity,60%diversifiedequity,20%longtermdebt
b) 10%sectoralequity,20%diversifiedequity,30%longtermdebt,and40%medium
termdebt
c) 80%longtermdebt,20%mediumtermdebt
d) 30%Sectoralequity,30%diversifiedequity,40%cash/liquidinvestments.

16. ThelimitofmaximumdepositincaseofMISaccountopenedinsinglenameis___
a) Rs.500000
b) Rs.900000
c) Rs.100000
d) Rs.450000
17. Iftheinterestrateis12%p.a.compoundedmonthly.Calculateeffectiverateofinterest?
a) 11.386%p.a.
b) 12.68%p.a.
c) 12%p.a.
d) Noneoftheabove

18. Mr.SharmahasinvestedRs.2000p.m.for4yearsinthebeginningofeverymonths.He
wantstoknowwhatwillbethefuturevalueofhisinvestmentafter4yearsifROIis12%
p.a.?
a) Rs.122445.21
b) Rs.9558.65
c) Rs.540585.21
d) Rs.123669.67
19. MaximumhowmuchoneemployercancontributeforhisemployeeunderEPS95?
a) Rs.541
b) Rs.239
c) 12%ofemployeesbasicsalary
d) 8.33%ofemployeessalary
20. Mr. Sohail got Rs.4lacs as gratuity after rendering service of 25 years. His last drawn
salary was Rs.10000 p.m. If his organization is covered under the Gratuity Act, find
taxablegratuity?
a) 144230.77
b) 350000
c) 255769.
d) NIL
21. InterestcreditedtoUnrecognizedProvidentFundshallbe_______
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a)
b)
c)
d)
e)

Fullyexempt
Fullytaxable
Exemptupto12%
Exemptupto9.5%
Exemptupto8.5%

22. Theminimumdisabilitypensiongiventoanemployeeis.
a) Rs.450p.m.
b) Rs.300p.m.
c) Rs.350p.m.
d) Rs.250p.m.
23. WhatisretrenchmentcompensationavailableundertheIndustrialDisputeAct,1947?
a) 15daysaveragepayforeverycompletedyearofserviceorpartthereofinexcessof
6months
b) 15daysaveragepayforeverycompletedyearofservice
c) 7daysaveragepayforeverycompletedyearofserviceorpartthereofinexcessof
6months
d) 7daysaveragepayforeverycompletedyearofservice
24. Whichofthefollowingisnotacauseofwealtherosion?
a) Fallininterestrates
b) Riseinthecostofliving
c) Inadequatelifeinsurancecover
d) Alloftheabove
25. Toprepareagoodretirementplanningofaclientafinancialplannerhastoundertake
aneffective_______process.
a) Consultation
b) Counseling
c) Conversation
d) communication
SECTION2

103=30Marks
Choosemostappropriateanswerwithshowingworking/reason.Eachquestioncarries3
marks.

26. ApersondepositsRs.400000inMonthlyIncomeSchemeofPostOfficeon15May2009.
Howmuchamounthewillreceiveonmaturity?
a) Rs.422666.67
b) Rs.420000
c) Rs.400000
d) Rs.634749.73

27. Mr.AnilGuptahasbeensavingRs.105000peryearforthepast5yearsandcontinuesto
save till age 50. His age is 30 years now. He will retire at age 60.He expects to live

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another15yearsafterretirement.Whatwillbetheaccumulatedsumhewouldhaveat
age55ifROIis13%p.a.compoundedquarterly?
a) Rs.38939977
b) Rs.34263794
c) Rs.35869855
d) Noneoftheabove

28. PPF a/c is opened on 21/11/1993, Calculate how much amount one can avail as first
withdrawalfacilityfromthedetailsbelow:
BalanceinPPFA/con

31/03/94
60000

31/03/95
168400

31/03/96
192000

31/03/97
240000

31/03/98
325000

31/03/99
415000
a) 120000
b) 96000
c) 48000
d) 162500
e) Noneoftheabove

29. Mr. X retired from XYZ Ltd. after completing 30 years 9 months. Salary at the time of
retirement is Rs.11500 p.m. Actual gratuity received is Rs.455000. Average salary for
previous10monthsisRs.9350.CalculatetheexemptedamountofgratuityifXYZLtd.is
notcoveredunderPaymentofGratuityAct?
a) Rs.350000
b) Rs.140250
c) Rs.144925
d) Rs.172500
30. Iftheinterestrateis9%p.a.Calculatemonthlyeffectiverateofinterestpermonth?
a) 9.38%
b) 8.649%
c) 0.72%
d) 0.78%
31. Mr.Yjoinedon1stJanuary1989inXYZLtd.andretiredon1stAJanuary2009.Hegot
leave encashment of Rs.295000. His last drawn salary is Rs.27000.His last 10 months
average salary is 25500. He availed 285 leaves during the service. What will be his
exemptedleavesalaryamount?
a) 255000
b) 267750
c) 27250
d) Noneoftheabove
32. I want to invest Rs.4000 annually for 4 years, Rs.5000 p.a. for next 6 years and then
Rs.8000 for next 4 years. If ROI is 14% p.a. find the Future value after 15 years if all
paymentsgiveninthebeginningofyear?
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a)
b)
c)
d)
e)

Rs.210244.49
Rs.184424.99
Rs.189000.56
Rs.239679
Noneofthese

33. Mr.XhastakenaloanofRs.10lacsfor5yearsatrateofinterest13.5%p.a.TheEMIs
willstartexactlyafter5yearsfromnow.FindtheInterestpaidin3rdyear?
a) 79676.55
b) 148406
c) 162937
d) Noneoftheabove

34. Mr. X needs Rs.1000/ per annum for 15 years and Rs.2000 p.a. for next 5 years, all
paymentsareinthebeginning.IftheROIis10%p.a.,howmuchmoneyshouldheinvest
today?
a) 10363.15
b) 69718.10
c) 63380.10
d) Noneoftheabove
35. Mr. Gupta spends now Rs.200000 p.a. for his house hold expenses to maintain his
standardofliving.After18yearshewillneedRs.350000p.a.ashishouseholdexpenses.
Calculatehisannualincreaserateinstandardofliving?
a) 3.16%p.a.
b) 3%p.a.
c) 4%p.a.
d) Noneoftheabove
SECTION3

35=15Marks
Choosethemostappropriateanswerwithshowingworking/reason.Eachquestioncarries5
marks.

36. Mr.AbhinavopenedaPPFaccounton31032007anddepositedRs.60000/asthefirst
contribution.AfterthathehasbeenincreasingthePPFcontributionbyRs.1000every
year till its maturity up to the maximum limit possible. Calculate what will be his
accumulatedbalanceinPPFaccountatthematurity?
a) 1781028.26
b) 1998510.52
c) 1770195.75
d) 1981811.408
e) Noneofthefollowing

37. Mr.Malikaged40;anNRIhasbeensavingRs.150000p.a.forlast5years.Hewantsto
come back India at age 60 and continue saving till 60. His life expectancy is 80. How
muchhecanspendmonthlyduringRetirementperiodi.e.from60to80ifROIis10.5%
p.a.andinflationis5.5%p.a.?
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a)
b)
c)
d)

102707.52
102303.48
719821.97
Noneoftheabove

38. Mr. Dinesh gupta has two sons name Sarthak (age 7) and Moksh (age 3). I want to
ensureavailabilityofRs.3lakhp.a.intodaystermforboth ofthemforthreeyears(in
the beginning of Ist years, IInd year and IIIrd year) when they will be admitted in
collegeatcompletedage18.IwanttoknowhowmuchshouldIinvestyearlyfromnow
tilloneyearbeforethelastpaymentofcollegefeesifROIis12%p.a.andinflationis5%
p.a.?
a) 95895
b) 85968
c) 78954
d) 92343
e) Noneoftheabove

PARTII(SUBJECTIVE)
SECTION4
53=15Marks

Answeranyfivequestions.Eachquestioncarries3marks.

39. What is Retirement Planning? What are the aspects to be considered while making
retirementplanningofaperson?
40. WriteadetailednoteonGratuity?
41. Whatisanannuity?Classifyannuitieswithexamples.
42. WriteadetailednoteonVoluntaryRetirementScheme?
43. WhatisthedifferencebetweenNominalrateofInterestandEffectiverateofinterest?
Giveexamplesalso?
44. WriteanoteonStatutoryProvidentFundAct1925?

SECTION5

35=15Marks

Answerthesequestions.Eachquestioncarries5marks.
45. WriteadetailednoteonEmployeesProvidentFundScheme,1952?
46. Writedetailednoteson

a) MonthlyIncomeSchemeofpostoffice
b) SeniorCitizenSavingScheme
47. Mr.Sharma,45yearsoldworkinginKotakMahindraBank,isearningRs.50000p.m.He
comes to you for his retirement planning. Prepare his Retirement Plan after getting
informationyouneed?

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