A person invested Rs. 2,50,000 in a fund. At the end of the year, the value of the fund is Rs. 3,00,000. If the market price is the same at the end of the year, then the nominal rate of return is
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → 20%
The nominal rate of return is the gain as a percentage of the amount invested:
\( \displaystyle \text{Rate} = \frac{\text{Final value} - \text{Amount invested}}{\text{Amount invested}} \times 100 \)
\( \displaystyle = \frac{300000 - 250000}{250000} \times 100 \)
\( \displaystyle = \frac{50000}{250000} \times 100 = 20\% \)