Kushagra invested Rs. 20,000 in a mutual fund in the year 2010. The value of the mutual fund increased to Rs. 32,000 in the year 2015, then the compound annual growth rate percentage of his investment is
[Given : \( (1.6)^{1/5}=1.098 \)]
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → 9.8%
From 2010 to 2015 is 5 years, so the compound annual growth rate is
\( \displaystyle \text{CAGR}=\left(\frac{32000}{20000}\right)^{1/5}-1 \)
\( \displaystyle =(1.6)^{1/5}-1 \)
\( \displaystyle =1.098-1=0.098 \)
So the CAGR is 9.8%.
CBSE Applied Mathematics (Class XII):
Compound Annual Growth Rate
