Aman made an investment of ₹ 2,00,000 in a no-fee fund for 1 year. At the end of year the value of investment increases to ₹ 2,50,000. Then nominal rate of return is:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → 25%
$\text{Initial investment} = 200000$
$\text{Final value} = 250000$
$\text{Nominal rate of return} = \frac{\text{Gain}}{\text{Initial investment}} \times 100$
$= \frac{250000 - 200000}{200000} \times 100$
$= \frac{50000}{200000} \times 100 = 25%$