NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Retirement Products
Meera, aged 62, buys an immediate annuity with a purchase price of ₹20,00,000 and an annuity rate of 6.5% per annum payable annually in arrears, with no return of purchase price. What is her annual annuity payout?
The annual annuity is the purchase price multiplied by the annuity rate: 20,00,000 × 6.5% gives ₹1,30,000 per year. With no return of purchase price, the payout is simply this yield on the amount invested.
- A₹1,30,000Correct
- B₹1,00,000
- C₹1,56,000
- D₹65,000
Explanation
Annual payout = 20,00,000 × 6.5% = ₹1,30,000. Check: 1,30,000 / 20,00,000 = 0.065. ₹1,00,000 uses 5%, ₹65,000 uses 3.25% (half rate), and ₹1,56,000 uses 7.8%.
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