Sanjay opened a grocery shop with an initial investment of ₹ 40,000. 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 `121/2%` . Calculate the net profit for the entire period of three years ?

Options

A. ₹ `6500`
B. ₹ `47025`
C. ₹ `7025`
D. ₹ `46500

Answer

To calculate the net profit for Sanjay's grocery shop over three years, we will follow these steps:

### Step 1: Calculate the loss for the first year.
- Initial investment = ₹40,000
- Loss in the first year = 5% of ₹40,000

\[ \text{Loss} = \frac{5}{100} \times 40,000 = 2,000 \]

- Amount left after the first year:

\[ \text{Amount after 1st year} = 40,000 - 2,000 = 38,000 \]

### Step 2: Calculate the profit for the second year.
- Profit in the second year = 10% of ₹38,000

\[ \text{Profit} = \frac{10}{100} \times 38,000 = 3,800 \]

- Amount after the second year:

\[ \text{Amount after 2nd year} = 38,000 + 3,800 = 41,800 \]

### Step 3: Calculate the profit for the third year.
- Profit in the third year = 12.5% of ₹41,800

\[ \text{Profit} = \frac{12.5}{100} \times 41,800 = 5,225 \]

- Amount after the third year:

\[ \text{Amount after 3rd year} = 41,800 + 5,225 = 47,025 \]

### Step 4: Calculate the net profit over the three years.
- Net profit = Final amount - Initial investment

\[ \text{Net Profit} = 47,025 - 40,000 = 7,025 \]

### Final Answer:
The net profit for the entire period of three years is **₹7,025**.

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