A person has an initial investment of ₹25000 in an investment plan. After 2, years it has grown ₹30000, then the rate of return on his investment is
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → 20%
Initial investment = ₹25000
Value after 2 years = ₹30000
Increase in value:
$30000 - 25000 = 5000$
Rate of return:
$\frac{5000}{25000} = 0.20$
$0.20 \times 100 = 20\%$
The rate of return is 20%.