Some Trick for Fast Calculation in CA Final SFM

Trick to Fast Calculation of Depreciation in WDV Method

Calculate First Year Depreciation at given rate

First Year Depreciation = (Assets Cost*Depreciation Rate)

For Second year and own wards

Second Year Depreciation = [First Year Depreciation*(1 – Depreciation Rate)]

Third Year Depreciation = [Second Year Depreciation*(1 – Depreciation Rate)]

And so on…

Example: -

Assets Cost = Rs. 1000000

Rate of Depreciation = 20%

Useful life of Assets = 8 Years

Method of Depreciation is WDV

Calculate Annual Depreciation.

Solution:-

Year	Calculation	Depreciation
1	1000000*20%	200000.00
2	200000*(1 - .20)	160000.00
3	160000*(1 - .20)	128000.00
4	128000*(1 - .20)	102400.00
5	102400*(1 - .20)	81920.00
6	81920*(1 - .20)	65536.00
7	65536*(1 - .20)	52428.80
8	52428(1 - .20)	41943.04

Installment Calculation

Equated Annual/Monthly Installment = (Loan Amount)/ Present Value Annuity Factor at Pre Tax Interest Rate

Example: -

Loan Amount = Rs. 600000

Rate of Interest = 14%

Tenure of Loan = 6 Years

Calculate Annual Installment.

Solution: -

Annual Installment = 600000/3.889

Annual Installment = Rs. 154281.31

Trick to Fast Calculation of Interest on Loan When Principal is paid equal Installment

Method I

Calculate First Year Interest at given rate

First Year Interest = (Loan Amount*Rate of Interest)

For Second year and own wards

Second Year Interest = [First Year Interest - (First Year Interest/Tenure of Loan)]

Third Year Interest = [Second Year Interest - (First Year Interest/Tenure of Loan)]

And so on…

Example: -

Loan Amount = Rs. 250000

Rate of Interest = 20%

Tenure of Loan = 5 Years

Principal is payable in equal Installment

Calculate Yearly Interest on Loan

Solution: -

Year	Calculation	Interest
1	250000*20%	50000
2	50000 – (50000/5)	40000
3	40000-10000	30000
4	30000-10000	20000
5	20000-10000	10000

Note: - This method is applicable only when Full Principal Amount is paid equally in given tenure.

Method II

Calculate First Year Interest at given rate

First Year Interest = (Loan Amount*Rate of Interest)

Second Year Interest = [(Loan Amount – Principal Paid)*Rate of Interest]

For Third year and own wards

Third Year Interest = [Second Year Interest – (First Year Interest - Second Year Interest)]

And so on…

Example: -

Loan Amount = Rs. 250000

Rate of Interest = 20%

Tenure of Loan = 5 Years

Principal is payable in equal Installment

Calculate Yearly Interest on Loan

Solution: -

Year	Calculation	Interest
1	250000*20%	50000
2	(250000-50000)*20%	40000
3	50000-(50000-40000)	30000
4	30000-10000	20000
5	20000-10000	10000

Dirty Power Formula (A^1/n)

Steps for Calculation

Step I: - √ 12 Times

Step II: - - 1

Step III: - Divide by N

Step IV: - + 1

Step V: - 12 Times * and Equal to

Example: -

Calculate Value of 233^1/11

Solution: -

Steps	Calculation	Value
I	12 Times √ 233	1.00133170586
II	-1	.00133170586
III	Divide by 11	.00012106416
IV	+ 1	1.00012106416
V	12 Times * and =	1.64189122272

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