Question

Ashish started the business with an initial investment of Rs. 500000. In the first year he incurred a loss of 4%. However during the second year he earned a profit of 5% which in third year rose to 10%. Calculate the net profit for the entire period of 3 years.

Answer 1

Given, 

Initial investment by Ashish = Rs.500000 

Loss in first year = 4% 

Profit in 2nd year = 5 % 

Profit in 3rd year = 10% 

Hence, 

Finally investment becomes \(= 500000({1}-\frac{4}{100})({1}+\frac{5}{100})({1}+\frac{10}{100})\)

\(= 500000\times\frac{24}{25}\times\frac{21}{20}\times\frac{11}{10}\)

= Rs.5090400 

Net profit = Rs.(5090400 – 500000) = Rs.554400