Discussion
Person 1 and Person 2 invest in three mutual funds A, B, and C. The amounts they invest in each of these mutual funds are given in the table.
| Mutual fund A | Mutual fund B | Mutual fund C | |
|---|---|---|---|
| Person 1 | ₹10,000 | ₹20,000 | ₹20,000 |
| Person 2 | ₹20,000 | ₹15,000 | ₹15,000 |
At the end of one year, the total amount that Person 1 gets is ₹500 more than Person 2. The annual rate of return for the mutual funds B and C is 15% each. What is the annual rate of return for the mutual fund A?
Answer: B
Mutual fund A returned 10%.
Let A's rate be r. Each person's total after a year:
\[ \begin{aligned} P_{1} &= 10000(1 + r) + 40000(1.15) = 56000 + 10000r \\ P_{2} &= 20000(1 + r) + 30000(1.15) = 54500 + 20000r \\ P_{1} - P_{2} &= 1500 - 10000r = 500 \Rightarrow r = 0.10 \end{aligned} \]
Check: Person 1 gets 57,000 and Person 2 gets 56,500, a difference of 500. A rate of 15% would give a difference of zero, and 7.5% or 20% give 750 and -500.
Post your comment
Please log in or register to post a comment.
Examination Categories
- SSC Exams
- Banking Exams
- Teaching Exams
- Civil Services Exams
- Railways Exams
- Engineering Recruitment Exams
- Defence Exams
- State Government Exams
- Police Exams
- Insurance Exams
- Nursing Exams
- Other Government Exams
- NRA CET
- PG Entrance Exams
- Campus Placement
- MBA Entrance Exams
- CUET and UG Entrance
- Judiciary Exams
- Regulatory Body Exams
- Software Development