AAFM Exam CWM_LEVEL_2 Topic 6 Question 86 Discussion

Actual exam question for AAFM's CWM_LEVEL_2 exam

Question #: 86
Topic #: 6

Section C (4 Mark)

Read the senario and answer to the question.

Mr. Bhatia owns a Maruti Wagonr with a monthly EMI of Rs. 6,312. The above loan will be completely repaid by August 2008. Mr. Bhatia planning to purchase a new car worth of Rs. 15 lakh. For this he has to take a full value loan of the car with 9% interest for 5 years. But his present car is in good condition and life of this car is approximately another 5 years repairs and maintenance cost are minimum. If he postpones his car purchasing plan now and deposit the same EMI outflow required for new car into an SIP with a minimum 15% yield for the next five years, then calculate the fund he can accumulate?

ARs. 23.66 lacs

BRs. 27.58 lacs

CRs. 23.49 lacs

DRs. 30.47 lacs

Show Suggested Answer

Suggested Answer: B

by Mitsue at Sep 07, 2024, 04:29 AM

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Lenora

1 days ago

I calculated the fund accumulation and I think it's around Rs. 27.58 lacs, so option B.

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Stefany

2 days ago

Hold on, guys. What if Mr. Bhatia decides to buy a Ferrari instead? Then the calculations would be completely different. We need more information!

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Olen

3 days ago

That's a good point, but the potential return from the SIP could outweigh the repair costs.

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Rolf

3 days ago

I agree with Stephaine. The math checks out, and B) is the correct answer. This is a classic finance problem, not rocket science.

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Lura

16 days ago

But what if the car needs major repairs in the next 5 years?

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Lenora

20 days ago

I agree, investing in an SIP with 15% yield seems like a better option.

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Olen

27 days ago

I think Mr. Bhatia should postpone buying a new car.

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Stephaine

1 months ago

The answer has to be B) Rs. 27.58 lacs. The monthly EMI of Rs. 6,312 for 5 years at 15% yield would definitely result in a higher accumulated fund than the other options.

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Anjelica

21 days ago

User 2

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Lashawn

23 days ago

User 1

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