Question

Person 1 and Person 2 invest in three mutual funds A, B, and C. The amounts they invest in each of these mutual funds are given in the table.
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At the end of one year, the total amount that Person 1 gets is ₹500 more than Person 2. The annual rate of return for the mutual funds B and C is 15\% each. What is the annual rate of return for the mutual fund A?

• A. 7.5\%
• B. 10\%
• C. 15\%
• D. 20\%

Hint:

When calculating the return on different investments, isolate the returns from each investment to determine their individual performance contributions.

Answer 1

The Correct Option is B

Step 1: Calculate returns from Mutual Funds B and C.
Using the 15\% annual return rate for funds B and C, calculate the total annual returns for both investors. Step 2: Determine the extra returns due to Mutual Fund A.
With the total annual returns from funds B and C calculated, determine the extra earnings that come specifically from Mutual Fund A's performance. Step 3: Solve for the return rate of Mutual Fund A.
Set up an equation based on the differences in investment and total returns to solve for the annual rate of return for Mutual Fund A, ensuring that it accounts for the additional ₹500 earned by Person 1 over Person 2.