Harish invested Rs. 8000 in a no-fee fund. After 3 years, the value of his investment increases to Rs. 27000. The compound annual growth rate (CAGR) percentage of his investment is
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → 50%
The CAGR is the constant yearly rate that turns the initial value into the final value:
\( \displaystyle \text{CAGR}=\left(\frac{\text{Final value}}{\text{Initial value}}\right)^{1/n}-1 \)
Here n = 3 years:
\( \displaystyle \text{CAGR}=\left(\frac{27000}{8000}\right)^{1/3}-1 \)
\( \displaystyle =\left(\frac{27}{8}\right)^{1/3}-1 \)
\( \displaystyle =\frac{3}{2}-1 \)
\( \displaystyle =0.5=50\% \)
CBSE Applied Mathematics (Class XII):
Compound Annual Growth Rate
