Question

Sanjay opened a grocery shop with an initial investment of Rs 40,000. In the first year, he incurred a loss of 5%. However during the second year, he earned a profit of 10% which in the third year rose to \(12\frac{1}{2}\)%. Calculate the net profit for the entire period of three years ? 

(a) Rs 6500 

(b) Rs 47025 

(c) Rs 7025 

(d) Rs 46500

Answer 1

(c) Rs 7025

At the end of three years, worth of Sanjay’s 

assets = 40000\(\big(1-\frac{5}{100}\big)\)\(\big(1+\frac{10}{100}\big)\)\(\big(1+\frac{12.5}{100}\big)\)

= 40000 x \(\frac{19}{20}\) x \(\frac{11}{10}\) x \(\frac{9}{8}\) = Rs 47025

\(\therefore\) His net profit = Rs 47025 – Rs 40000

= Rs 7025.