A person invested Rs. 2,00,000 in a mutual fund in year 2012. The value of the mutual fund increased to Rs. 3,00,000 in year 2017. The percentage of compound annual growth rate on the investment is:
(Given: \( (1.5)^{1/5}=1.084 \))
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → 8.4%
From 2012 to 2017 is n = 5 years. The compound annual growth rate is
\( \displaystyle \text{CAGR}=\left(\frac{\text{Final value}}{\text{Initial value}}\right)^{1/n}-1 \)
\( \displaystyle =\left(\frac{3{,}00{,}000}{2{,}00{,}000}\right)^{1/5}-1 \)
\( \displaystyle =(1.5)^{1/5}-1 \)
\( \displaystyle =1.084-1=0.084 \)
So CAGR = 8.4%.
CBSE Applied Mathematics (Class XII):
Compound Annual Growth Rate
