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

25%

The correct answer is Option (2) → 25% **

Initial Investment (Principal): $Rs. 80,000$

Final Value (Amount): $Rs. 1,00,000$

Time Period: 3 years

Calculate the Total Profit (Gain):

$\text{Gain} = \text{Final Value} - \text{Initial Investment}$

$\text{Gain} = 1,00,000 - 80,000 = 20,000$

Calculate the Rate of Return:

The formula for the absolute rate of return is:

$\text{Rate of Return} = \left( \frac{\text{Gain}}{\text{Initial Investment}} \right) \times 100$

$\text{Rate of Return} = \left( \frac{20,000}{80,000} \right) \times 100$

$\text{Rate of Return} = \frac{1}{4} \times 100 = 25\%$