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Mr. Vishnu has an initial investment of Rs.80,000 in an investment plan. After 3 years, it has grown to Rs.1,00,000, then his rate of return is

Solution

✅ Correct Option: 2

Mr. Vishnu invested Rs. 80,000 initially, and after 3 years it grew to Rs. 1,00,000. The rate of return is the total percentage increase over these 3 years.


Initial Investment = Rs. 80,000

Final Amount = Rs. 1,00,000

Profit = Final Amount - Initial Investment

Profit = 1,00,000 - 80,000

Profit = Rs. 20,000


Rate of Return = ProfitInitial Investment×100\dfrac{\text{Profit}}{\text{Initial Investment}} \times 100

Rate of Return = 20,00080,000×100\dfrac{20,000}{80,000} \times 100

Rate of Return = 2080×100\dfrac{20}{80} \times 100

Rate of Return = 14×100\dfrac{1}{4} \times 100

Rate of Return = 25%25\%


Therefore, the rate of return is 25%25\%.

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