Question

A invests in a scheme which gives him 28% interest. The next year, he removes the entire amount and
invests it in a new scheme which gives him 100% interest. What is the average annual return he receives?​

Answer 1

Answer:

68.42%

78%

Step-by-step explanation:

Let say A invest  = 100M

interest he receives = (28/100) 100M = 28M

Next year invested = 100M + 28M = 128M

Interest received = (100/100)128M = 128M

Total Interest received in 2 years = 28M + 128M = 156M

Total Amount invested in 2 year = 100M + 128M = 228M

the average annual return he receives = (156M/228M ) * 100

= 68.42 %

If original invested amount is considered then

Invested amount = 100M

Interest received per year = 156M/2 = 78M

the average annual return he receives = (78M/100M) * 100 = 78 %