New Register for Workshop on How to start for NABARD 2025 (Stepwise Plan) - Apr 26, 7 PM

    Question

    A man invests ₹40,000 in a business. After 3 years, he

    sells 40% of his stake for a 30% profit and reinvests the amount. After another 2 years, he sells 20% of his remaining stake at a 45% profit and reinvests half of the profit. At the end of 5 years, he sells the rest of his stake, which has appreciated by 25%. What is the total value of his investment at the end of 5 years?
    A ₹57,640 Correct Answer Incorrect Answer
    B ₹72,000 Correct Answer Incorrect Answer
    C ₹74,500 Correct Answer Incorrect Answer
    D ₹76,000 Correct Answer Incorrect Answer

    Solution

    Initial investment = ₹40,000. First sale after 3 years: 40% of ₹40,000 = ₹16,000. Profit = ₹16,000 × 30% = ₹4,800. Reinvested amount = ₹16,000 + ₹4,800 = ₹20,800. Remaining stake after 1st sale = ₹40,000 - ₹16,000 = ₹24,000. Second sale after 5 years: 20% of ₹24,000 = ₹4,800. Profit = ₹4,800 × 45% = ₹2,160. Reinvested amount = ₹4,800 + ₹1,080 (half the profit) = ₹5,880. Remaining stake after 2nd sale = ₹24,000 - ₹4,800 = ₹19,200. Appreciation after 5 years = ₹19,200 × 25% = ₹4,800. Final value of remaining stake = ₹19,200 + ₹4,800 = ₹24,000. Total value = ₹20,800 + ₹5,880 + ₹24,000 = ₹50,680. Plus profit reinvested earlier = ₹4,800 + ₹2,160 = ₹6,960. Final value = ₹50,680 + ₹6,960 = ₹57,640. Closest option: a) ₹57,640.

    Practice Next

    Relevant for Exams: