Question:
Ashish started the business with an initial investment of Rs 500000. In the first year he incurred a loss of 4%. However during the second year he earned a profit of 5% which in third year rose to 10%. Calculate the net profit for the entire period of 3 years.
Solution:
Profit for three year $s=\mathrm{P}\left(1-\frac{\mathrm{R}_{1}}{100}\right)\left(1+\frac{\mathrm{R}_{2}}{100}\right)\left(1+\frac{\mathrm{R}_{3}}{100}\right)$
$\Rightarrow 500,000\left(1-\frac{4}{100}\right)\left(1+\frac{5}{100}\right)\left(1+\frac{10}{100}\right)$
$=500,000(0.96)(1.05)(1.10)$
$=554,400$
Thus, the net profit is Rs 554,400 .
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