Question

Mr. Rajan invested Rs 1,00,000 in US Stock Markets when the GBPINR rate was 75. After one year his investment appreciated by 20% in GBP terms. He sold of his investments and repatriated the money to India at the then existing rate of 80. what was real returns in INR?

Answer 1

Money invested by Rajan before $1$ year was $=$Rs. $100000$

Money in UK pounds at $75$ is $=\frac{100000}{75}=1333.33$ Pounds

Now, after $1$ year invested amount was appreciated by $20\%$

$\Rightarrow 20\%$ of $1333.33=\frac{20}{100}\times 1333.33=266.66$

Total investment becomes $=1333.33+266.66=1600$ Pounds

This $1600$ Pounds at Indian currency at $80=1600\times 80=$ Rs.$1,28,000$

Hence, Rajan's investment of Rs.$1,00,000$ becomes Rs.$1,28,000$ in $1$ year

Therefore, his profit $\%=\left[\frac{(128000-100000)}{100000}\right]\times 100=28\%$