Question

Jitendra set up a factory by investing Rs. 2500000. During the first two successive years his profits were 5% and 10% respectively. If each year the profit was on previous year’s capital, compute his total profit.

Answer 1

Given details are,

Initial investment by Jitendra was = Rs 2500000

Profit in first 2 successive years were = 5% and 10%

Final investment after two successive profits = 2500000 (1+ 5/100) (1 + 10/100)

= 2500000 (105/100) (110/100)

= 2500000 (1.05) (1.1)

= 2887500

∴ Jitendra total profit is = 2887500 – 2500000 = Rs 387500.