Ch.7 · NAV Calculation Rules · hard
How does the TER affect the NAV of the Regular Plan vs Direct Plan over 10 years?
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EXPLANATION
The compounding impact of 1% TER difference is substantial: at 12% gross, Direct Plan (0.1% TER) = 11.9% net; Regular Plan (1.1% TER) = 10.9% net. Over 10 years on ₹10L: Direct = ₹10L × (1.119)^10 ≈ ₹30.8L; Regular = ₹10L × (1.109)^10 ≈ ₹28.4L. The ~₹2.4L difference shows why TER comparison and Direct Plan consideration matters significantly for long-term investors.
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