A person invested ₹10000 in a stock of a company for 6 years. The value of his investment at the end of each year is given in the following table:

The compound annual growth rate (CAGR) of his investment is:

[Given $(1.4)^{1/6}= 1.058$]

5.8%

The correct answer is Option (1) → 5.8%

Initial investment $=10000$

Value after $6$ years $=14000$

Compound annual growth rate formula

$\text{CAGR}=\left(\frac{\text{Final Value}}{\text{Initial Value}}\right)^{\frac{1}{n}}-1$

$=\left(\frac{14000}{10000}\right)^{\frac{1}{6}}-1$

$=(1.4)^{\frac{1}{6}}-1$

Given $(1.4)^{\frac{1}{6}}=1.058$

$\text{CAGR}=1.058-1$

$=0.058$

$=5.8\%$

The compound annual growth rate of the investment is $5.8\%$.