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Mr. Sayyad kept ₹ 40,000 in a bank at 8% compound interest for 2 years. Mr. Fernandes invested ₹ 1,20,000 in a mutual fund for 2 years. After 2 years, Mr. Fernandes got ₹ 1,92,000. Whose investment turned out to be more profitable?

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Mr. Sayyad: 

Mr. Sayyad kept ₹ 40,000 in a bank at 8% compound interest for 2 years P = ₹ 40000, R = 8%, n = 2 years 

∴ Compound interest (I) 

= Amount (A) – Principal (P)

= 40000 [(1 +0.08)2 – 1] 

= 40000 [(1.08)2 – 1] 

= 40000(1.1664 – 1)

= 40000 (0.1664) 

= ₹ 6656 

∴ Mr. Sayyad’s percentage of profit Interest

Mr. Fernandes:

Amount invested by Mr. Fernandes in mutual fund = ₹ 120000 

Amount received by Mr. Fernandes after 2 years = ₹ 192000 

∴ Profit earned by Mr. Fernandes 

= Amount received – Amount invested 

= 192000- 120000 

= ₹72000 

∴ Mr. Fernandes percentage of profit Profit earned

= 60%

 From (i) and (ii),

Investment of Mr. Fernandes turned out to be more profitable.

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