NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Comparison of Products Across Categories
A client invests Rs 1,00,000 in a product that grows at 10% pa for 3 years with annual compounding and no interim payouts. At exit the whole gain is taxed at a flat 20%, with no other costs. What is the post-tax maturity value?
The post-tax maturity value is Rs 1,26,480. Rs 1,00,000 compounding at 10% for three years becomes Rs 1,33,100, giving a gain of Rs 33,100. Tax at 20% on that gain is Rs 6,620, which leaves Rs 1,26,480.
- ARs 1,26,480Correct
- BRs 1,24,800
- CRs 1,26,200
- DRs 1,33,100
Explanation
Maturity value = 1,00,000 x 1.1^3 = 1,33,100. Gain = 33,100. Tax at 20% = 6,620. Post-tax value = 1,33,100 - 6,620 = 1,26,480. Rs 1,33,100 ignores tax, and 1,24,800 taxes simple-interest style or uses a wrong base.
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