A person has an initial investment of Rs. 25000 in an investment plan…

The correct answer is Option (3) → 20%

Note: The given answer is as per the official NTA Answer Key. However, the question does not say whether the rate is for the whole period or per year, and Option (1) could also be a possible answer, as explained below.

    \( \displaystyle \text{Rate of return} = \frac{\text{Final value} - \text{Initial value}}{\text{Initial value}} \times 100 \)

    \( \displaystyle = \frac{30000 - 25000}{25000} \times 100 = 20\% \) for the whole 2 years

    Per year: \(20\% \div 2 = 10\%\)

Option (1) 10% — Should also be correct, though not the answer given by NTA. The investment grew by 20% over 2 years. If the question means the rate for each year, the 20% is spread over the 2 years: \(20\% \div 2 = 10\%\) per year.

Option (2) 25% — Incorrect. It matches neither the 2-year rate nor the yearly rate.

Option (3) 20% — Correct. The money grew from Rs. 25,000 to Rs. 30,000, a gain of Rs. 5,000, which is 20% of Rs. 25,000. This is the return over the whole 2 years.

Option (4) 15% — Incorrect. It matches neither the 2-year rate nor the yearly rate.