AFM numericals: the 13 formula families that cover every calculation — and a free 10-question drill
Ask anyone who failed AFM by a few marks where they lost them, and the answer is almost always the same: the calculations. Not because the arithmetic is hard, but because the paper gives you 72 seconds a question and a numerical that you have not drilled takes three minutes — if the formula comes back at all. The fix is not more theory. It is repetition, by formula family, with the working checked every time.
So the Mock Centre now has a Numericals Drill: 316 AFM calculation questions in 13 formula families, every one with a step-by-step worked solution and a one-line reason for each wrong option (because in numericals the wrong options are the common slips — the forgotten scrap value, the un-annualised rate, the sign the wrong way round). Learn mode shows the working after each answer; Exam mode gives two minutes a question; wrong answers enter Smart Revision like any other question.
The map: every AFM calculation belongs to one of these
Print this table. If you can do one question from each row without looking anything up, you can do the AFM numericals.
| # | Family | The formulas | Qs |
|---|---|---|---|
| 1 | Interest simple, compound, effective rate, Rule of 72 | SI = P×R×T · CI: A = P(1+i)^n · effective rate = (1+r/m)^m − 1 · Rule of 72 | 34 |
| 2 | Annuities EMI, present value, future value, perpetuity, sinking fund | EMI = P·i(1+i)^n/[(1+i)^n−1] · PV = C/(1+i)^n · FV annuity = C[(1+i)^n−1]/i · perpetuity = C/i · annuity due = ordinary × (1+i) | 28 |
| 3 | Bonds price, current yield, YTM, duration | Price = PV of coupons + PV of redemption · current yield = coupon ÷ price · YTM ≈ [C + (F−P)/n] ÷ [(F+P)/2] · %Δprice ≈ −MD × Δy | 22 |
| 4 | Capital budgeting NPV, IRR, payback, ARR, profitability index | NPV = PV of inflows − outlay · accept NPV > 0 · IRR: rate where NPV = 0 · payback = years to recover · ARR = avg profit ÷ investment | 24 |
| 5 | Ratio analysis liquidity, leverage, coverage, profitability, market | Current = CA/CL · Quick = (CA−stock)/CL · D/E = LTD/NW · DSCR = (PAT+Dep+Int)/(Int+Instalment) · EPS, P/E, GP%, stock turnover, debtor days, ROE = ROA × leverage | 33 |
| 6 | Depreciation SLM, WDV, sum-of-years'-digits, part-year charges | SLM = (cost − scrap) ÷ life · WDV = rate × opening WDV · SYD fraction = remaining life ÷ sum of digits · part-year = proportionate | 20 |
| 7 | Bank reconciliation & rectification arithmetic | From cash book (Dr): + cheques issued not presented, − cheques deposited not credited, ± pass-book-only items · wrong-side error = 2× · transposition ÷ 9 | 20 |
| 8 | Final accounts & company accounts COGS, profit, closing stock, share forfeiture | COGS = opening stock + purchases + direct expenses − closing stock · GP = sales − COGS · NP = GP − indirect expenses (after adjustments) · forfeiture surplus → capital reserve | 14 |
| 9 | Working capital operating cycle, Tandon methods, turnover method | WCG = TCA − OCL · Tandon I: MPBF = 75% of WCG · Tandon II: MPBF = WCG − 25% of TCA · Nayak: WC = 25% of turnover, bank 20%, margin 5% · WC = expenses × cycle ÷ 360 | 16 |
| 10 | Forex arithmetic direct/indirect quotes, cross rates, forward premium | Bank buys low / sells high · cross rate via USD (chain rule) · forward = spot ± points · premium % = points ÷ spot × 12/months × 100 · direct ↔ indirect are reciprocals | 18 |
| 11 | Marginal & standard costing contribution, BEP, P/V ratio, margin of safety, variances | Contribution = sales − variable cost · BEP units = fixed ÷ contribution/unit · BEP value = fixed ÷ P/V ratio · MoS = (actual − BE) ÷ actual · MPV = AQ(SP−AP) · MUV = SP(SQ−AQ) · LRV = AH(SR−AR) · LEV = SR(SH−AH) | 37 |
| 12 | Bank accounting NPA provisioning, rebate on bills, statutory reserve, CRR/SLR, deposit interest | Sub-standard 15% · doubtful: secured 25/40/100% by age, unsecured 100% · loss 100% · rebate = bill × rate × unexpired/12 · statutory reserve 20% of profit · CRR 3% (cash at RBI), SLR 18% (with the bank) | 26 |
| 13 | Cash flow (indirect method), cost of capital & WACC, CAPM, leverage | Operating CF = PBT + depreciation − profit on sale ± working-capital changes − tax paid · Kd(after tax) = Kd(1−t) · CAPM Ke = Rf + β(Rm − Rf) · WACC = Σ weight × cost | 24 |
How the drill works
Pick a family, start in Learn mode. Answer, press Save & Check, and the full working appears — formula, substitution, arithmetic, answer — plus why each other option is wrong.
Switch to Exam mode when the family feels easy. Two minutes a question, timer, palette, no help until you submit. Then review every question, including the ones you got right.
Let Smart Revision do the rest. Every numerical you get wrong comes back after 2, 7 and 15 days. A formula you have applied correctly three times, weeks apart, is a formula you will not lose in the hall.
Do the mixed drill before the paper. The exam mixes families; so does the mixed set. Twenty questions, 40 minutes, once a day in the last fortnight.
Try ten now — one from each of ten families
🧮 Free drill · 10 numericals, one from each of ten families
Work each one on paper first, then click an option. The working opens immediately, with the reason each wrong option is wrong. Budget about two minutes a question.
Question 1 of 10 · Interest
₹1,00,000 is invested at 8% per annum compounded annually. The maturity value after 3 years is closest to:
Working. A = P(1 + i)^n = ₹1,00,000 × (1.08)^3 = ₹1,00,000 × 1.2597 = ₹1,25,971. Compound interest = ₹25,971.
Why the others are wrong
(a) that is simple interest — compound interest earns interest on interest
(b) that is the interest earned, not the maturity value
(d) that compounds for 2 years only
Question 2 of 10 · Annuities
A loan of ₹5,00,000 at 12% per annum (monthly rests) is repayable in 24 equal monthly instalments. The EMI is closest to:
Working. Monthly rate i = 12% ÷ 12 = 1%; n = 24. EMI = P × i × (1+i)^n ÷ [(1+i)^n − 1] = ₹5,00,000 × 0.01 × 1.2697 ÷ 0.2697 = ₹23,537. First month's interest = ₹5,000; the rest of the EMI reduces principal.
Why the others are wrong
(a) that is the first month's INTEREST only — an EMI also repays principal
(b) that is principal ÷ months — it ignores interest
(d) that charges FLAT interest on the full principal for the whole tenor — the reducing-balance EMI is lower
Question 3 of 10 · Bonds
A 8% bond of face value ₹1,000 is quoted at ₹950. Its current yield is approximately:
Working. Current yield = annual coupon ÷ market price = ₹80 ÷ ₹950 = 8.42%. Coupon is paid on face value; yield is earned on what you pay — a bond below par yields more than its coupon, above par less.
Why the others are wrong
(a) misplaced decimal
(b) that scales the coupon by price ÷ face — it multiplies where it should divide
(d) that is the coupon rate on FACE value — current yield uses the market price
Question 4 of 10 · Capital budgeting
A project costs ₹10,00,000 and yields ₹4,00,000 a year for 3 years. At a cost of capital of 10% (annuity factor 2.487), the NPV is closest to:
Working. PV of inflows = ₹4,00,000 × 2.487 = ₹9,94,741; NPV = ₹9,94,741 − ₹10,00,000 = ₹-5,259 → REJECT (NPV < 0).
Why the others are wrong
(a) that is the undiscounted surplus
(b) that is the PV of inflows before deducting the outlay
(d) the sign is reversed
Question 5 of 10 · Ratio analysis
Net profit ₹1,20,000; equity shares 40,000 of ₹10 each; market price ₹60. EPS and P/E are:
Working. EPS = net profit ÷ number of shares = ₹1,20,000 ÷ 40,000 = ₹3. P/E = market price ÷ EPS = ₹60 ÷ ₹3 = 20 times.
Why the others are wrong
(a) P/E divides price by EPS, not by face value
(b) EPS is profit ÷ number of shares, not the face value
(c) that is the earnings yield (EPS ÷ price), not P/E
Question 6 of 10 · Depreciation
An asset costing ₹8,00,000 is depreciated at 25% on the written-down-value method. The depreciation for year 3 is:
Working. Year-by-year: Y1: ₹8,00,000 × 25% = ₹2,00,000; Y2: ₹6,00,000 × 25% = ₹1,50,000; Y3: ₹4,50,000 × 25% = ₹1,12,500. WDV at the end of year 3 = ₹3,37,500.
Why the others are wrong
(a) that multiplies the year-1 charge by the number of years
(b) that is the year-1 charge — under WDV the base falls every year
(d) that is the year-4 charge
Question 7 of 10 · Working capital
Total current assets ₹800 lakh; other current liabilities (excluding bank borrowings) ₹300 lakh. MPBF under Tandon Method I and Method II is:
Working. WCG = TCA − OCL = ₹800 lakh − ₹300 lakh = ₹500 lakh. Method I: 75% of WCG = ₹375 lakh (margin 25% of the gap). Method II: WCG − 25% of TCA = ₹500 lakh − ₹200 lakh = ₹300 lakh (margin 25% of TCA → current ratio ≈ 1.33).
Why the others are wrong
(a) OCL must be deducted first to get the working-capital gap
(c) no margin under I and the wrong base under II
(d) swapped — Method II is the tighter one
Question 8 of 10 · Forex arithmetic
EUR/USD 1.085/1.086; USD/INR 84.5/84.6. The bank's BUYING rate for EUR against rupees (an exporter's receipt) is approximately:
Working. Chain rule: 1 EUR = 1.085 USD (bank buys EUR at the bid) and 1 USD = ₹84.5 (bank buys USD at the bid). EUR/INR buying = 1.085 × 84.5 = ₹91.68. Selling rate = 1.086 × 84.6 = ₹91.88.
Why the others are wrong
(b) that is the dollar rate, not the cross rate
(c) that is the SELLING rate (ask × ask)
(d) that divides instead of multiplying — the classic direction error
Question 9 of 10 · Marginal & standard costing
Selling price ₹200 per unit; variable cost ₹140; fixed costs ₹6,00,000. The break-even point in units and in sales value is:
Working. Contribution per unit = 200 − 140 = ₹60. BEP units = fixed ÷ contribution = ₹6,00,000 ÷ ₹60 = 10,000 units. BE sales = 10,000 × ₹200 = ₹20,00,000 (= fixed ÷ P/V ratio 30%).
Why the others are wrong
(a) BE sales value = units × selling price (or fixed ÷ P/V ratio), not units × contribution
(b) that divides fixed cost by the selling price instead of the contribution
(d) that divides by variable cost
Question 10 of 10 · Bank accounting
A doubtful account (1–3 years) has an outstanding of ₹30 lakh with realisable security of ₹20 lakh. The provision required is:
Working. Secured portion ₹20 lakh × 40% (1–3 years) = ₹8 lakh; unsecured portion ₹10 lakh × 100% = ₹10 lakh. Total = ₹18 lakh.
Why the others are wrong
(a) 100% on everything applies to loss assets (or to the secured part only beyond 3 years)
(b) that provides on the secured portion only
(d) that applies 40% to the WHOLE outstanding — the unsecured part needs 100%
Answer all ten to see your score.
Five habits that turn numericals into free marks
- Write the formula before the numbers. Half the errors in the drill come from substituting into a half-remembered formula. Writing "EMI = P·i(1+i)ⁿ ÷ [(1+i)ⁿ − 1]" takes four seconds and prevents the ₹20,833 trap.
- Check the period. Monthly rate = annual ÷ 12; quarterly compounding = four periods; a 3-month forward premium is annualised by × 4. Most wrong options in the drill are period errors.
- Know which way the sign goes. Price down when yields rise; adverse when actual cost is above standard; premium added, discount deducted; asset increase deducted in the cash-flow statement.
- Sanity-check the size. An EMI must exceed principal ÷ months; a quick ratio must be below the current ratio; a doubtful-asset provision must be at least the unsecured portion. The drill's wrong options fail these checks.
- Use the textbook's rate when the stem gives one. CRR is 3% today, but a sum that says "CRR 4.5%" wants 4.5%. Our September law update lists the figures that have moved.
🧮 Open the Numericals Drill. Log in to the Mock Centre → Home → Numericals Drill. The free demo opens the Module A families (depreciation, bank reconciliation); every Mock Centre pass includes all 13. Pair it with the 26 Numericals Masterclass videos under Video Classes and the free AFM formula sheet.
Independent study aid — not affiliated with, endorsed by, or sponsored by IIBF. Exam pattern, question types and passing criteria are set by IIBF — confirm current rules at iibf.org.in. Figures in the drill are illustrative; where a regulatory rate has changed, the working says so.