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With an initial payment of Rs 1,000 for 1 year, the redeemable value at the end is Rs 1,028. What is the average annual return after the given time period?Options 2.34% 2.60% 2.83% 2.90%

Question

With an initial payment of Rs 1,000 for 1 year, the redeemable value at the end is Rs 1,028. What is the average annual return after the given time period?Options 2.34% 2.60% 2.83% 2.90%

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Solution

The average annual return can be calculated using the formula for return on investment (ROI), which is:

ROI = (Final Value - Initial Value) / Initial Value * 100%

Here, the initial value is Rs 1,000 and the final value is Rs 1,028.

So, ROI = (1,028 - 1,000) / 1,000 * 100%

ROI = 28 / 1,000 * 100%

ROI = 2.8%

So, the average annual return after the given time period is 2.8%. The closest option to this value is 2.83%.

This problem has been solved

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