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.