Question 1
Let us see now, the subject will live 20 year more after retirement (I wonder how does he know that). To sustain he has to have a constant inflow of 55,000 each year. The simple question is that how much does he need to save till his retirement. In even simpler words how much do you have to save today to spend 55,000 every year for 20 years from now on? Given that interest rate is 7 percent.

This is a “Present Value Annuity” problem, since future cash flows are constant.
Therefore,
Present Value = A cash flow (Remember they are constant) X Present Value Annuity Factor (From the “time value of money” tables)
So,
55,000 X 10.5940 = 582,670
Mr. Anwar will need Rs. 582,670 at the time of his retirement to sustain. (And it is of course understood he will have to save it in a bank that give 7% interest.)


Question 2

At this question arslanbhutto is totally right. Only little explanation is needed.

Company earns Rs. 15 on a share. Since the stockholders have alternative, equivalent‐risk ventures yielding 20 percent per year on average, therefore Rs. 15 are 20% of Share price.

Or

Share Price X .20 = 15

Or

Share price = 15/.20

Or

Share Price = 75

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Nor fame, nor power, nor love, nor leisure.
Others I see whom these surround—
Smiling they live, and call life pleasure;—
To me that cup has been dealt in another measure.