Archive / Investment Adviser (Level 2) / Miscellaneous Aspects of Retirement Planning

nism-series-xb-gross-corpus-year-7-before-marriage-outflow[ INVESTMENT ADVISER (LEVEL 2) ]

In Case 2, the corpus balance at the end of Year 6 is Rs. 2,50,09,496.67. During Year 7, it earns 8% interest (Rs. 20,00,759.73). What is the gross corpus value at the end of Year 7 BEFORE paying the daughter's marriage expense of Rs. 1,94,87,171?

[ A ]Rs. 2,50,09,497

[ B ]Rs. 2,63,69,526

[ C ]Rs. 2,70,10,256[ CORRECT ]

[ D ]Rs. 2,85,50,000

Takeaway

Crediting 8% interest to the Year 6 closing balance gives a gross Year 7 corpus of Rs. 2,70,10,256, before the marriage expense is paid, so option C is correct.

Derivation

Gross balance Year 7 = opening (Rs. 2,50,09,496.67) + 8% interest (Rs. 20,00,759.73) = Rs. 2,70,10,256.40, rounding to Rs. 2,70,10,256. This is an intermediate checkpoint question within the larger balance-tracking schedule, isolating just the interest-credit step before the Rs. 1,94,87,171 marriage outflow is subtracted (which produces the separately-tested net closing balance of Rs. 75,23,085), testing whether candidates can correctly sequence 'credit interest first, then subtract outflow' within a single year's roll-forward.

Why the others fail

A — Rs. 2,50,09,497

This is the Year 6 closing balance itself, before that year's 8% interest is credited, not the gross Year 7 balance after interest.

B — Rs. 2,63,69,526

This was the closing balance at the end of Year 5, two years earlier than the requested gross Year 7 balance.

D — Rs. 2,85,50,000

This is an inflated estimate consistent with assuming roughly a 14% yield rather than the stated 8% interest rate for Year 7.