The advertised tax return is 8% but on my 6-year maturity certificate it is only written Rs.8005 on maturity. It was originally printed as Rs.10,005 but they have striked it and written Rs.8005. Why is it so low?

I still don’t get it. If it is 8% compunded half yearly for 6 years then it should be

5000 * (1.08)^12 = 12590

isn’t it?!!

NSC use to be 15% – that was 10005. Then the interest was reduced, and so instead of printing the new ones – the same are used.

The 8005 is the correct value at 8% compounded.

Low or high is a question that has to be seen before you buy the certificate.

Rate of interest 8% compounded half yearly.

# Rs. 1000/- grow to Rs. 1601/- in six years.

Old Nsc rates was 12% and so it was double the invested amount. Post office is using old stationery.

ANSWER TO

I still don’t get it. If it is 8% compunded half yearly for 6 years then it should be

5000 * (1.08)^12 = 12590

isn’t it?!!

It is 8005.16 AND NOT 12590 !

MATURITY VALUE=

5000(1+8/200)^12=8005.16, since compounded half yearly so, it will be 8/200 insteed of 8/100.