GATE 2024 DA – Question 8
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.
| Mutual fund A | Mutual fund B | Mutual fund C | |
|---|---|---|---|
| Person 1 | ₹10,000 | ₹20,000 | ₹20,000 |
| Person 2 | ₹20,000 | ₹15,000 | ₹15,000 |
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?
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Correct answer: (B) 10%
Explanation
Both people invest ₹50,000 in all, so the difference in what they get at the end is the difference in the returns. Let fund A return $r$. Person 1 earns $10000r + 40000 \times 0.15$ and Person 2 earns $20000r + 30000 \times 0.15$. The difference is $-10000r + 10000 \times 0.15 = -10000r + 1500 = 500$, so $r = 0.10$, which is 10%.