Question

Hasan and John invested rupees 65000 and earn 12% profit out of the business if Hasan made a profit of rupees 3000 what is the ratio of their capitals​

Answer 1

Answer:

Reinvestment of earnings at the same rate of return to grow the principal amount every year is compounding. Compounding is a compelling concept. It is because the interest of your invested money is also earning interest. This is known as compound interest. The value of the investment keeps growing at a geometric rate (always increasing) rather than at an arithmetic rate (straight-line). Reinvestment of earnings at the same compound interest rate of return would help in continually growing the principal amount year-on-year.