Miss Megha purchases mutual fund units at a Net Asset Value (NAV) of Rs. 11. After 400 days, she redeems them at an NAV of Rs. 12.50. What is her compounded annual rate of return?

The compounded annual growth rate (CAGR) measures the annualized return on an investment. It is calculated as ([(End\ Price / Begin\ Price)^{1/n} - 1]), where (n) is the number of years. Here, End Price = 12.50, Begin Price = 11, and holding period in years = 400/365 ≈ 1.0958. Substituting: ((12.50/11)^{1/1.0958} - 1 ≈ 1.1236 - 1 = 0.1236), or 12.36%. This accounts for the slightly longer than one-year holding period, showing the investment’s annual growth rate.