#### Amar Singh started a business with an initial investment of ₹ 400000. In the first year he incurred a loss of 4%. However, during the second year, he earned a profit of 5% which in the third year rose to 10%. Calculate his net profit for the entire period of 3 years.

**Solution:**

It is given that

Investment (P) = ₹ 400000

Loss in the first year = 4%

Profit in the second year = 5%

Profit in the third year = 10%

We know that

Total amount after 3 years = P (1 + r/100)^{n}

Substituting the values

= 400000 (1 – 4/100) (1 + 5/100) (1 + 10/100)

By further calculation

= 400000 × 24/25 × 21/20 × 11/10

= ₹ 443520

So the net profit after 3 years = 443520 – 400000 = ₹ 43520

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