Anisha invested Rs.20000 in a mutual fund in the year 2016, which increased to Rs.36000 in the year 2024. The percentage compounded annual growth rate(CAGR) of her investment is:
(Given: $(1.8)^{1/8} = 1.076$)
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → 7.6% p.a
$CAGR = \left(\frac{Final\ Value}{Initial\ Value}\right)^{\frac{1}{n}} - 1$
$Initial\ Value = 20000 ,\ Final\ Value = 36000 ,\ n = 2024 - 2016 = 8$
$\frac{Final}{Initial} = \frac{36000}{20000} = 1.8$
$CAGR = (1.8)^{\frac{1}{8}} - 1$
$\text{Given } (1.8)^{\frac{1}{8}} = 1.076$
$CAGR = 1.076 - 1 = 0.076$
$CAGR = 7.6\%$