Amit made an investment of Rs. 27,000 in a no-fee fund for 3 years. At the end of the third year, the value of the investment increased to Rs. 64,000. The compound annual growth rate (CAGR) percentage of the investment is
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → 33.33%
\( \displaystyle \text{CAGR}=\left(\frac{\text{Final value}}{\text{Initial value}}\right)^{1/n}-1 \)
Here n = 3:
\( \displaystyle \text{CAGR}=\left(\frac{64000}{27000}\right)^{1/3}-1 \)
\( \displaystyle =\left(\frac{64}{27}\right)^{1/3}-1 \)
\( \displaystyle =\frac{4}{3}-1=\frac{1}{3} \)
So the CAGR is \( \frac{1}{3}\times 100=33.33\% \).