The cost of a raw material increased with equal percentage in two years. The price increased to ₹145.20 from ₹120. What is the equal annual percentage increase?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. 10%.
Let the equal annual increase be r%.
120 × (1 + r)² = 145.20
⇒ (1 + r)² = 145.20 / 120 = 1.21
⇒ 1 + r = √1.21 = 1.10
⇒ r = 0.10 = 10% per year