Aman started a factory with an initial investment of Rs 100000.

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.

Solution:

Aman's profit for three years $=\mathrm{P}\left(1-\frac{\mathrm{R}_{1}}{100}\right)\left(1+\frac{\mathrm{R}_{2}}{100}\right)\left(1+\frac{\mathrm{R}_{3}}{100}\right)$

$=100,000\left(1-\frac{5}{100}\right)\left(1+\frac{10}{100}\right)\left(1+\frac{12}{100}\right)$

$=100,000(0.95)(1.10)(1.12)$

$=117,040$

$\therefore$ Net profit $=$ Rs $117,040-$ Rs 100,000

$=\operatorname{Rs} 17,040$

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