An investment grew by 10% in the first year and by 15% in the second year, each year’s growth being on the value at the start of that year. If the investment was worth Rs 25300 after two years, what was the sum invested?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Rs 20000
Each year the value is multiplied by its own growth factor, so the final value is the sum times both factors.
Factors: \(1+\frac{10}{100}=1.1\) and \(1+\frac{15}{100}=1.15\)
Sum \(\times1.1\times1.15=25300\)
Sum \(=25300\div1.265=20000\)
The sum invested was Rs 20000.
Why the other options are incorrect
Option (1) Rs 21000 — Incorrect. Rs 21000 would grow to \(21000\times1.1\times1.15=26565\), not Rs 25300.
Option (3) Rs 20240 — Incorrect. Rs 20240 would grow to \(20240\times1.1\times1.15=25603.6\), not Rs 25300.
Option (4) Rs 19500 — Incorrect. Rs 19500 would grow to \(19500\times1.1\times1.15=24667.5\), not Rs 25300.