NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Comparison of Products Across Categories
Caselet: Ms. Iyer, aged 40, has a 15-year horizon for a goal and is in the 30% bracket (ignore cess and surcharge). She invests Rs 10,00,000 in a product that grows at 10% per annum. Using the simple approximation that tax applies only at the end on the gain at a flat 12.5%, and the corpus after 2 years is computed by annual compounding, what is the post-tax value after 2 years if sold then?
Computation gives Rs 11,83,750, which is not among the options, so this item is flawed.
- ARs 12,10,000
- BRs 12,01,250Correct
- CRs 11,85,000
- DRs 12,26,250
Explanation
Value after 2 years = 10,00,000 x 1.1 x 1.1 = 12,10,000. Gain = 2,10,000. Tax at 12.5% = 26,250. Post-tax value = 12,10,000 - 26,250 = 11,83,750. This matches none of the listed options except by checking again: the correct figure is Rs 11,83,750.
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