NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Retirement Planning Basics
Anita, 35, wants a retirement corpus of Rs 2,00,00,000 at age 60. She has no existing savings and expects an annual return of 10% during accumulation, with investments made at the end of each year. Given that the future value annuity factor for 25 years at 10% is 98.347, the annual investment required is closest to:
The annual investment equals the target corpus divided by the future value annuity factor: Rs 2,00,00,000 divided by 98.347 gives about Rs 2,03,360 per year. Dividing by years alone ignores compounding returns and overstates the requirement.
- ARs 8,00,000
- BRs 2,03,360Correct
- CRs 1,01,680
- DRs 20,00,000
Explanation
Annual investment = 2,00,00,000 / 98.347 = about Rs 2,03,360. Rs 8,00,000 simply divides the target by 25 years and ignores returns. Rs 1,01,680 is half the right value, and Rs 20,00,000 is 10% of the target.
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