Question

Mr. Rajkumar has invested 20000 in a year 2014 for 5 years. If CAGR for that investment turned out to be 11.84 %. What will be the end balance?

Answer 1

Given t = 5 years

V_begin = 20000 & CAGR = 11.84%

\(\because\) CAGR = \([(\frac{V_{final}}{V_{begin}})^{1/t}-1]\times100\)

⇒ 11.84  = \([(\frac{V_{final}}{20000})^{1/5}-1]\times100\) 

⇒ 1 + 0.1184 = \((\frac{V_{final}}{20000})^{1/5}\)

⇒ \(\frac{V_{final}}{20000}\) = (1.1184)⁵ = 1.7498

⇒ V_final = 34996

The end balance will be 34996.