CAT 2021 Slot 2 QA Question 3: Raj invested ₹ 10000 in a fund. At the end of first year, he incurred a loss but his balance was more than ₹ 5000. This balance, when invested for another year, grew and the percentage of growth in th

Question

Raj invested ₹ 10000 in a fund. At the end of first year, he incurred a loss but his balance was more than ₹ 5000. This balance, when invested for another year, grew and the percentage of growth in th

Accepted Answer

Let the percentage loss in the first year be p%, and let $r = \dfrac{p}{100}$.

Since the second-year growth percentage is five times the first-year loss percentage, the final multiplier is
$(1-r)(1+5r)=1.35$
$1+4r-5r^2=1.35$
$5r^2-4r+0.35=0$
$r = 0.1\ 	ext{or}\ 0.7$

The first-year balance was mor