NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Retirement Planning Basics
Anita, aged 35, needs a corpus of ₹2,00,00,000 at retirement in 25 years. She will invest a fixed amount at the end of each year in a product earning 8% a year. Given that the future value annuity factor for 25 years at 8% is 73.106 (use it as given), the annual investment required is closest to:
The annual investment is about ₹2,73,600. Divide the target ₹2,00,00,000 by the future value annuity factor of 73.106 for 25 years at 8%. Dividing by the number of years ignores investment growth and overstates the required saving.
- A₹8,00,000
- B₹2,73,600Correct
- C₹2,92,400
- D₹1,36,800
Explanation
Annual investment = 2,00,00,000 / 73.106 = about ₹2,73,570, closest to ₹2,73,600. Dividing by 25 gives 8,00,000, ignoring returns. 2,92,400 would use a factor of about 68.4, and 1,36,800 would use a factor of about 146.2. Both are wrong factors.
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