Question:
Aman started a factory with an initial investment of Rs 100000. In the first year, he incurred a loss of 5%. However, during the second year, he earned a profit of 10% which in the third year rose to 12%. Calculate his net profit for the entire period of three years.
Solution:
Aman's profit for three years $=\mathrm{P}\left(1-\frac{\mathrm{R}_{1}}{100}\right)\left(1+\frac{\mathrm{R}_{2}}{100}\right)\left(1+\frac{\mathrm{R}_{3}}{100}\right)$
$=100,000\left(1-\frac{5}{100}\right)\left(1+\frac{10}{100}\right)\left(1+\frac{12}{100}\right)$
$=100,000(0.95)(1.10)(1.12)$
$=117,040$
$\therefore$ Net profit $=$ Rs $117,040-$ Rs 100,000
$=\operatorname{Rs} 17,040$