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in Compound Interest by (56.3k points)

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.

1 Answer

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Best answer

Given,

Initial investment by Ashish is = Rs 500000

Incurred loss in the first year is = 4%

Profit in 2nd year is = 5 %

Profit in 3rd year is = 10%

By using the formula,

A = P (1 + R/100)n

= 500000 (1 – 4/100) (1 + 5/100) (1 + 10/100)

= 500000 (96/100) (105/100) (110/100)

= 500000 (0.96) (1.05) (1.1)

= 554400

∴ The net profit for the entire period of 3 years is Rs 554400.

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