Mathematics for FinancePYQ June 24Question 1562 of 512
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You bought a painting 10\displaystyle 10 years ago an investment. You originally paid 85,000\displaystyle 85,000 for it. If you sold it for 4,84,050\displaystyle 4,84,050, what was your annual return on investment?

Options

A47%\displaystyle 47\%
B4.7%\displaystyle 4.7\%
C19%\displaystyle 19\%
D12.8%\displaystyle 12.8\%
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Correct Answer

✅ Option c — 19%\displaystyle 19\%

All Options:

  • A47%\displaystyle 47\%
  • B4.7%\displaystyle 4.7\%
  • C19%\displaystyle 19\%
  • D12.8%\displaystyle 12.8\%

Detailed Solution & Explanation

The Compound Annual Growth Rate (CAGR) is: CAGR=(FVPV)1n−1\text{CAGR} = \left(\frac{FV}{PV}\right)^{\frac{1}{n}} - 1 Given: * Original cost (PV\displaystyle PV) = 85,000\displaystyle 85,000 * Sale price (FV\displaystyle FV) = 4,84,050\displaystyle 4,84,050 * Time (n\displaystyle n) = 10\displaystyle 10 years Substituting the values: CAGR=(4,84,05085,000)110−1=(5.6947)0.1−1≈1.19−1=19%\text{CAGR} = \left(\frac{4,84,050}{85,000}\right)^{\frac{1}{10}} - 1 = (5.6947)^{0.1} - 1 \approx 1.19 - 1 = 19\% Hence, **Option C** is the correct answer.

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