Question

Jitendra set up a factory by investing Rs 2500000. During the first two successive years his profits were 5% and 10% respectively. If each year the profit was on previous year's capital, compute his total profit.

Answer 1

Profit at the end of the first year = P \[\left( 1 + \frac{R}{100} \right)\]
\[ = 2, 500, 000\left( 1 + \frac{5}{100} \right)\]
\[ = 2, 500, 000\left( 1 . 05 \right)\]
\[ = 2, 625, 000\]
Profit at the end of the second year = P \[\left( 1 + \frac{R}{100} \right)\]
\[ = 2, 625, 000\left( 1 + \frac{10}{100} \right)\]
\[ = 2, 625, 000\left( 1 . 10 \right)\]
\[ = 2, 887, 500\]
Total profit = Rs 2, 887, 500 - Rs 2, 500, 000
 = Rs 387, 500