Mr. Mehta invested Rs 1,00,000 in UK Stock Markets when the GBPINR rate was 75. After one year his investment appreciated by 20% in GBP terms. He sold of his investments and repatriated the money to India at the then existing rate of 80. what was real returns in INR?

     Mr. Mehta invested Rs 1,00,000 in UK Stock Markets when the GBPINR  rate was 75. After one year his investment appreciated by 20% in GBP terms. He sold of his investments and repatriated the money to India at the then existing rate of 80. what was real returns in INR?

    a) He has made a Profit of 20%

    b) He has made a Loss of 20%

    c) He has made a Profit of 28%

   d) He has made a Loss of 28%

 Explanation

  Mr. Mehta invested Rs 1,00,000 in UK Stock when the GBPINR rate was 75

 So he had invested 1,00,000/75 = 1333.33 pounds in UK Stocks

 His investment grew by 20%: 1333.33*20% = 1333.33 + 266.66 = 1600

 He Repatriating at GBPINR rate of 80: 1600*80 = 128000

 Therefore his investment in INR terms have grown from Rs 1,00,000 to Rs 1,28,000

 Return: 128000 - 100000 = 28000, Return in %: 28000*100/100000 = 28%