I invested Rs.50000 in a business. In the first year I suffered a loss of 5%. In the second and the third years (assuming that profit was reinvested for the next year), I made profits of 10% and 15%. Instead had I invested the money at 10% p.a. compound interest for the three years, how much additional amount would I have earned?

  • Option 1)

    Rs.3842.50

  • Option 2)

    Rs.6460.50

  • Option 3)

    Rs.6462.50

  • Option 4)

    Rs 8842

  • Option 5)

    Rs.4242.50

Answers (1)

Loss of 5 % = 50000 \times \frac{5 }{100}= 2500

Remaining amount= 47500

After 10 % gain = \frac{110}{100} \times 47500

Amount= 52250

After 15 5 gain amount = \frac{115}{100} \times 52250 = 60087.50

Amount compounded annually at 10 % p.a

For three year = 50000 [ 1 + \frac{10}{100} ] = 66550

Difference = 66550 -60087. 50 = 6462.50

Exams
Articles
Questions