A person invested Rs. 5,00,000 in a fund. At the end of the year, the value of the fund is Rs. 6,50,000. The nominal rate of return, if the market price is the same at the end of the year is:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → 30%
The rate of return is the gain as a percentage of the amount invested:
\( \displaystyle \text{Gain}=6{,}50{,}000-5{,}00{,}000 \)
\( \displaystyle =\text{Rs. }1{,}50{,}000 \)
\( \displaystyle \text{Rate of return}=\frac{1{,}50{,}000}{5{,}00{,}000}\times100 \)
\( \displaystyle =30\% \)