Mathematics

Which is better investment : 6% ₹100 shares at ₹120 or 8% ₹10 shares at ₹15

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In the first case:

Income on ₹120 = 6% of ₹100 = ₹6

$\therefore \text{ Income on ₹1} = ₹\dfrac{6}{120} \\[0.5em] = ₹\dfrac{1}{20}$

In the second case:

Income on ₹15 = 8% of ₹10 = ₹0.8

$\therefore \text{ Income on ₹1} = ₹\dfrac{0.8}{15} \\[0.5em] = ₹\dfrac{8}{150} \\[0.5em] = ₹\dfrac{4}{75}$

Now,

$\dfrac{1}{20} = \dfrac{1 \times 15}{20 \times 15} = \dfrac{15}{300} \\[0.7em] \dfrac{4}{75} = \dfrac{4 \times 4}{75 \times 4} = \dfrac{16}{300}$

Since 15 < 16, therefore investment in second case (i.e. 8% ₹10 shares at ₹15) is more profitable than the investment in first case.

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