Mohan, age 30, lives in Mumbai and works for a Pharma Company. Mohan has been full of liabilities initially and took some loans to meet them. His company every year gives him performance bonus which he expects this year also receiving very soon.
Mohan has 5 years old Kush and looking for education planning for him which can cost him 700000 Rs in current valuation at the age of 18. Escalation in the cost price will be around 8%. He had invested a sum of 50000 in Equity Mutual fund when the Kush was one year old and today ‘s valuation is 73205.
He is still left with a personal loan of Rs. 500000 which he has to re-pay in remaining five years and paying EMI of 12,159.
Mohan wants to buy a New car in just 3 months or so, Car is costing 50000 Rupees. The car dealer has given him two payment options –
1) Re- Pay Rs. 500000 in 3 years with zero interest in equal installments
2) He can Pay full amount and can get a 15% discount on this full payment.
Mohan has two Home Loans running of 50 Lac for 20 years and 40 Lac for 15 years respectively and has already paid 10 years and 5 years of EMI till date.The rate of Home Loan are 9% and 8% Respectively.
Question NO.1 Which Option Mohan shall go for In case of Buying a Car ( if current Interest rate Prevailing in Market is 7%)
