DBA - Quantitative Skills Project
Quantitative Skill
Financial Planning for Mr George Tan & Mrs Mary Chan
Batch No: DBA 2A/11 Lecturer: Ms Cindy Lum Submission Date: 18 May 11
GROUP MEMBERS
Wong Kim Fatt Hoon Qiu Ning Huang Hui Zhen Eldwin Quek Kiok Liang James Chua Ming Loon
Quantitative Skill
2011
CONTENT PAGE
Page 1: Title Page Page 2: Contents Page 3: Executive Summary Page 4: Table 1 [Financial Plan for 20 Years invest in stock, ordinary annuity & annuity due] & Company Background Page 5: Table 2 [Comparison of investment options in term of risk and return] & Chart 1 [Comparison of capital and return for investment] Page 6: Recommendations for Part 1 Page 7: Table 3 [Renting compared to buying a home for staying purpose] Page 8: Table 4 [Monthly payment for principal and interest of $120,000 mortgage] & Calculations for monthly mortgage payment & Total interest incurred. Page 9: Recommendations for Part 2 Page 10: Conclusions for both Part 1 & 2. Page 11: References Page 12: Appendices Page 13: Appendices Page 14: Appendices
Page 2 of 14
Quantitative Skill
2011
Executive Summary We have planned a financial planning for newlywed couple, Mr and Mrs George Tan with little knowledge of investment and low risk profile. They are early thirty with $6,000.00 combine of income monthly. We have prepared a comparison table and chart on stock, ordinary annuity and annuity due in term of return and risk profile for investment time frame of 20 years. Besides, investment company background also been analysed by us due to market stability and durability issue. According to their risk profile, we encourage them to invest in annuity due of $300.00 quarterly payment at 8% interest compounding quarterly. Total investment amount of $24,000.00 and return of $35,294.23 in 20 years time. Buying a house definitely is better option than renting for this couple because their financial status is allowed them to own a house with comfortable instalment payment monthly. We have compared
Financial Planning for Mr George Tan & Mrs Mary Chan
Batch No: DBA 2A/11 Lecturer: Ms Cindy Lum Submission Date: 18 May 11
GROUP MEMBERS
Wong Kim Fatt Hoon Qiu Ning Huang Hui Zhen Eldwin Quek Kiok Liang James Chua Ming Loon
Quantitative Skill
2011
CONTENT PAGE
Page 1: Title Page Page 2: Contents Page 3: Executive Summary Page 4: Table 1 [Financial Plan for 20 Years invest in stock, ordinary annuity & annuity due] & Company Background Page 5: Table 2 [Comparison of investment options in term of risk and return] & Chart 1 [Comparison of capital and return for investment] Page 6: Recommendations for Part 1 Page 7: Table 3 [Renting compared to buying a home for staying purpose] Page 8: Table 4 [Monthly payment for principal and interest of $120,000 mortgage] & Calculations for monthly mortgage payment & Total interest incurred. Page 9: Recommendations for Part 2 Page 10: Conclusions for both Part 1 & 2. Page 11: References Page 12: Appendices Page 13: Appendices Page 14: Appendices
Page 2 of 14
Quantitative Skill
2011
Executive Summary We have planned a financial planning for newlywed couple, Mr and Mrs George Tan with little knowledge of investment and low risk profile. They are early thirty with $6,000.00 combine of income monthly. We have prepared a comparison table and chart on stock, ordinary annuity and annuity due in term of return and risk profile for investment time frame of 20 years. Besides, investment company background also been analysed by us due to market stability and durability issue. According to their risk profile, we encourage them to invest in annuity due of $300.00 quarterly payment at 8% interest compounding quarterly. Total investment amount of $24,000.00 and return of $35,294.23 in 20 years time. Buying a house definitely is better option than renting for this couple because their financial status is allowed them to own a house with comfortable instalment payment monthly. We have compared
References: - Quantitative Skills Text Book, 1st edition, Pearson Custom Publishing, 2011 - www.yahoofinance.com Interest rate = 15% / 12 = 1.25% Number of period = 20 x 12 = 240 FV = P(1+R)N, $3,000(1+0.0125)240 = $3,000(1.0125)240 = $59,146.48 Page 12 of 14