Rahul invested Rs. 20000 in a mutual fund in year 2018. If the value of mutual fund increased to Rs. 32000 in year 2023, then the compound annual growth rate of his investment is: [given that \((1.6)^{\frac{1}{5}} = 1.098\)]
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → 9.8%
From 2018 to 2023 is \(n = 5\) years. The compound annual growth rate is
\( \displaystyle \text{CAGR} = \left(\frac{\text{Final value}}{\text{Initial value}}\right)^{\frac{1}{n}} - 1 \)
\( \displaystyle = \left(\frac{32000}{20000}\right)^{\frac{1}{5}} - 1 \)
\( \displaystyle = (1.6)^{\frac{1}{5}} - 1 \)
\(= 1.098 - 1 = 0.098\)
So the CAGR is 9.8%.
CBSE Applied Mathematics (Class XII):
Compound Annual Growth Rate
