Question

Aman started a factory with an initial investment of Rs 100000. 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%. Calculate his net profit for the entire period of three years.

Answer 1

Aman's profit for three years = P \[\left( 1 - \frac{R_1}{100} \right)\left( 1 + \frac{R_2}{100} \right)\left( 1 + \frac{R_3}{100} \right)\]
\[ = 100, 000\left( 1 - \frac{5}{100} \right)\left( 1 + \frac{10}{100} \right)\left( 1 + \frac{12}{100} \right)\]
\[ = 100, 000\left( 0 . 95 \right)\left( 1 . 10 \right)\left( 1 . 12 \right)\]
\[ = 117, 040\]
∴ Net profit = Rs 117, 040 - Rs 100, 000
 = Rs 17, 040