Mr shah deposited as fd Rs 320000 in a bank at 10% compound interest for 2 years. He also invested Rs 240000 in mutual fund. He got Rs 305000 in mutual funds after 2 years. Which of his investment was more profitable
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Answer:
The profit on CI will be: 3,20,000 (1+0.1)2 = 3,87,200
= 3,87,200-3,20,000
=67,200
Profit in Mutual funds:
305000-2,40,000= 65,000
Now we can calculate percentage profit on both investments:
CI: 67,200/3,20,000*100= 21%
MF: 65,000/2,40,000*100= 27.08%
It is pretty evident that MF investment was more profitable given that the percentage profit was higher on investment and duration was 2 years.
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