NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Miscellaneous Aspects of Retirement Planning
Mr. Desai retires with a corpus of Rs 1,00,00,000 and withdraws Rs 8,00,000 at the start of each year. The portfolio earns 10% in year 1 and the withdrawal is taken before returns accrue. What is the corpus at the end of year 1?
The year-end corpus is Rs 1,01,20,000. Taking the Rs 8,00,000 withdrawal at the start leaves Rs 92,00,000, which then grows at 10% to Rs 1,01,20,000. Deducting the withdrawal after growth would wrongly give Rs 1,02,00,000.
- ARs 1,01,20,000Correct
- BRs 1,02,00,000
- CRs 1,00,80,000
- DRs 92,00,000
Explanation
Withdrawal at start leaves 1,00,00,000 - 8,00,000 = 92,00,000. Growth at 10% gives 92,00,000 x 1.10 = 1,01,20,000. Rs 1,02,00,000 wrongly deducts withdrawal after growth (1,10,00,000 - 8,00,000). Rs 92,00,000 ignores returns.
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