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EMI, CAGR & Depreciation · Question 45 of 66

Question 45

MediumOriginal question

An investment grows from ₹20,000 to ₹29,282 in 4 years. What is its compound annual growth rate? (Take (1.1)4=1.4641(1.1)^{4} = 1.4641.)

Options for question 45

Show the answer and explanation
CorrectNot quiteAnswer A

Correct answer: A

Explanation

  1. EB=29,28220,000=1.4641=(1.1)4\frac{E}{B} = \frac{29{,}282}{20{,}000} = 1.4641 = (1.1)^{4}.

  2. CAGR =1.1−1=10%= 1.1 - 1 = 10\%.

Worth noting

11.6% divides the total growth of 46.41% by 4, which ignores compounding.

Concept
CAGR from the start and end values
Typical time
90 s
Your time
—
The rule this testsRate of return and CAGR
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