Amit invested Rs. 25,000 in a no-fee fund. After one year, the value of the fund rose to Rs. 30,000 then the nominal rate of return on the investment is
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → 20 %
The nominal rate of return is the gain as a percentage of the amount invested:
\( \displaystyle \text{Rate of return}=\frac{30000-25000}{25000}\times 100 \)
\( \displaystyle =\frac{5000}{25000}\times 100 \)
\( =20\% \)