Question

Q Hema started a business by investing ` 2,50,000. During the first three successive years, she earned a profit of 5%, 10% and 12% per annum respectively. If in each year, the profit was added on the capital at the end of the previous year, calculate her total profit after 3 years.

Answer 1

Initial capital = Rs.2,50,000

At the end of the first year, profit obtained = 5%
ie Profit at end of first year,
P1 = (5/100)*250000
= Rs.12500

Total capital at end of first year = Initial capital + P1
= 250000 + 12500
= Rs.2,62,500

At the end of the second year, profit obtained = 10%
ie Profit at end of second year,
P2 = (10/100)*(Total capital at the end of first year)
= (10/100)*262500
= Rs.26250

Total capital at end of second year = Total capital at the end of first year + P2
= 262500 + 26250
= Rs.2,88,750

At the end of the third year, profit obtained = 12%
ie Profit at end of third year,
P3 = (12/100)*(Total capital at the end of second year)
= (12/100)*288750
= Rs.34650


Total profit after three years = Profit at the end of first year + Profit at the end of second year + Profit at the end of third year
= P1 + P2 + P3
= 12500 + 26250 + 34650
= Rs.73400

Hence, Hema's total profit after 3 years = Rs.73400