If the starting value of an investment is ₹10,000 and it grows to ₹20,000 in 2 years, then the value of compounded annual growth rate (CAGR) is :
[Use : $\sqrt{2}=1.414$]
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → 41.40%
The compounded Annual growth (CAGR) is,
$CAGR=\left(\frac{FV}{PV}\right)^{\frac{1}{t}}-1$
$=\left(\frac{20,000}{10,000}\right)^{\frac{1}{2}}-1$
$=\sqrt{2}-1$
$=0.414=41.4\%$