Statistics & Applications > Financial Math

Medium

applied

Which of the following is correct about the compound annual growth rate?

It is an average annualized return of an investment.

It is calculated by taking the arithmetic mean of series of returns.

It is a linear measure that does not account for the effects of compounding.

It smoothens out the volatile nature of year by year growth/decay rates and provides more accurate results.

✅ Correct Option: 4

Related questions:

2025: 3 June Shift 1

A company purchased a machine for ₹ 15,00,000 and its effective life is estimated to be 10 years. A sinking fund is created for replacing the machine at the end of its effective life when its scrap value is ₹ 2,42,000. What amount company should provide, at the end of every year out of profits for the sinking fund if it accumulates an interest of 5% per annum? [Given(1.05)¹⁰=1.629]

2025: 16 May Shift 1

If a moneylender charges 'interest' at the rate of 10 rupees per 100 rupees per half year, payable in advance, then the effective rate of interest per annum is

2026: 30th May Shift 2

Which of the following is correct about the sinking fund?

2025: 14 May Shift 1

An annuity in which the periodic payment begin on a fixed date and continue forever is called

2025: 29 May Shift 2

A trust invites a deposit of lumpsum amount from individual so that annual scholarship of Rs.5000 is paid. Rate of interest is 5% per annum. If the scholarship is to start at the end of this year then the amount needed to deposit to Trust is:

2026: 30th May Shift 1

Amayra takes a loan of ₹5,00,000 at an interest of 10% per annum for a period of three years. The equated monthly installment (EMI) by using flat rate method, she has to pay is:

Which of the following is correct about the compound annual growth rate?

Keyboard Shortcuts