# VU MGT411 Assignment 1 Complete Solution Spring 2013

Q No 01:-

Cost of Basket in 2012 = Wheat + Wheat Flour + Rice Basmati broken + Rice Irri-6 + Masur Pulse Washed + Moong Pulse Washed + Mash Pulse Washed

CPI 2012 = 55+65+95+75+125+write else urself

1405Rs

Inflation Rate Consumption Prospective

Inflation Rate = {(CPI current period – CPI preceding period) / CPI preceding

period}*100}

(1405-1365)/1365*100

2.93%

Inflation Rate Production Prospective

GDP Deflator 2012

GDP Deflator 2011

Inflation Rate =Nominal GDP/Real GDP*100

245/220*100

111.36

GDP deflator = Nominal GDP/Real GDP*100

215/195*100

110.26

Inflation rate = {(GDP deflator current period – GDP deflator preceding period) /

GDP Deflator preceding period

(111.36-110.26)/110.26*100

0.997%

Question 2.

You have to find the Present value or PV to know about the amount that ur father invested
and you already have the future value.

Then you can easily calculate the cost of your dream house, by getting the future value FV of the amount ur father gave to you which is 8, 00,000

Now you have to find out the FV or future value of your lottery that u won 2 years ago and invested so n will be 17 there coz 2 years before and 15 from now on

b.

FV of your brother = 10,000(1.09)10 = 23,669

How much more money, you will need to invest to get the same amount at the end of 10 years like your brother.

Use following formula
FV = PV * (1 + i)n
23,669 = PV *

23,669 = PV * (1.075)10

23,669 = PV * 2.06

Now you can calculate PV amount u need.