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?
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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 %
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