Mr. Mittal invested Rs. 20,000 in a mutual fund in the year 2019. The value of the mutual fund increased to Rs. 32,000 in the year 2024. The compound annual growth rate of his investment is:
[Given \((1.6)^{1/5} = 1.098\)]
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → 9.8%
From 2019 to 2024 is n = 5 years. The compound annual growth rate is
\( \displaystyle \text{CAGR} = \left(\frac{\text{Final value}}{\text{Initial value}}\right)^{1/n} - 1 \)
\( \displaystyle = \left(\frac{32000}{20000}\right)^{1/5} - 1 \)
\(= (1.6)^{1/5} - 1\)
\(= 1.098 - 1 = 0.098\)
So the CAGR is 9.8%.
CBSE Applied Mathematics (Class XII):
Compound Annual Growth Rate
