The potential return from three forms of investment by means of mathematical formulas and graphs

International Research Journal of Engineering and Technology (IRJET) e-ISSN: 2395-0056

Volume: 09 Issue: 08 | Aug 2022 www.irjet.net p-ISSN: 2395-0072

The potential return from three forms of investment by means of mathematical formulas and graphs

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Abstract - This research paper summarizes the “The potential return from three forms of investment by means of mathematical formulas and graphs.” The data has been taken from 2016 to 2022. For this we have used different mathematical formulas, analyzed it graphically and structured it in the form of a research paper.

Key Words: Return, Investment, Gold, Fixed Deposit, Asian Paints, Stock

1.INTRODUCTION

Intoday’stumultuousword,ifmanhasonecommongoal,itistomakepecuniarygains.Nowtherearetwochiefwaystogo aboutthatinthemodernworld.Thefirstoneistoworkforyourselfandearnanincomeandtheotheroneentailsinvesting yourassetssothattheyappreciateovertime.Thereareseveralinvestmentvehiclesthatonecanlookinto.Someofthem includebonds,stocks,mutualfunds,realestate,preciousmetals,fixeddeposits,smallbusiness,oracombinationofallofthe above.Thepurposeofmyresearchstatementistoacquaintyouwiththepotentialbenefitsandmercenaryreturnsfromthree oftheaforementionedinvestmentswhichare-gold,fixeddepositsandstockofthemulti-nationalcompanyAsianPaints.This paperwouldhelpyoudecidewhichinvestmentisforyouafterweighingalltheprosandcons.

1.1 Gold

Itishardtosaywhenourloveaffairwiththeyellowmetal beganbutarcheological evidencesuggeststhatgoldwasfirst discoveredinEgyptin3000B.C.Afterwards,plentyofempiresbeganusinggoldcoinsfortransactivepurposesbutthiscould notlasttoolonginthe20thcentury.Although,almosteveryindustrializedcountrystoppeddealingingoldcoins,itremaineda highlysought-afterproductduetoitsrarityandreputation.Decadeslater,goldisnowmorethanjustacurrency,itisalong terminvestment.Goldisseenasadiversifyingelementtoyourportfoliowhichaidsinreducingtherisksassociatedwith investmentsandprovidingasafehaventotheinvestors.Withtheworld’sundividedattentiononstock markets,IPO’sand technologystartups,it’snothardtonoticewhygoldwasoverlooked.Itisnotflashy,itneverbecomestheflavorofthemonthas itcontinuestositandgain valuequietly.Therefore, for investorslookingto protecttheir wealthintimesof political and economicturmoilandwishingtobuildtheirwealthoverthelongtermcanrestassuredmaketheirinvestmentsingold.

1.2 Fixed Deposits

Fixeddeposits(FD)arefinancialinstrumentswhichareofferedbybanksandsomenon-bankingfinancialcompanies.Itisan investmentplanwhereonecandeposittheirlumpsummoneyforafixedtenureandearnapre-definedrateofinterestonit. Almostallthemarket-ledinvestmentsbeargreatpotentialriskbutfixeddepositsontheotherhandaremoresecureand reliableastheyarenotsubjectedtochangesthatoccurduetothemarketvolatility.Morethan75%oftheIndianpopulationis constitutedofmiddle-incomegroup.Peopleofthisgrouphaveaverymeagreamountwhichislefttoinvestaftermeetingall theirliabilities.Thisiswhymostofthemhaveaninclinationtowardsrisk-freeinvestmentslikefixeddeposits.Therearetwo types of interest given by banks which is simple interest and compound interest. Simple interest is basically the interest computedontheoriginalprincipalamountwhereascompoundinterestisinterestoninterest.Itiscalculatedontheprincipal aswellaspreviousperiod’sinterest. WehavetakentheFDratesoftheStateBankOfIndia(SBI)whichwasfoundedin1806in Calcutta.SBIrepresentsasterlinglegacyofmorethan200years.ItisIndia’slargestandoldestcommercialbankwhichenjoys thefaithofmillionsofcustomersacrossthesocialspectrum.

1.3 Asian Paints

AsianPaintsisaleadingIndianMulti-NationalPaintAndCoatingManufacturingCompanywhichwassetupin1942.The currentmanagingdirectorandchiefoperatingofficerofthecompanyisAmitSyngle.ThecompanyispresentintheHome Improvement,Decor,HealthandHygienesegmentamongmanyothersegments.ThecompanyhasagroupturnoverofRS.289 billionandadesirablereputationinthecorporateworld.StockofAsianPaintshasabookvalueofRs.144butitiscurrently

2022, IRJET | Impact Factor value: 7.529 | ISO 9001:2008 Certified Journal |

International Research Journal of Engineering and Technology (IRJET) e-ISSN: 2395-0056

Volume: 09 Issue: 08 | Aug 2022 www.irjet.net p-ISSN: 2395-0072

tradingatthepriceofRs.3428(ason15thAugust,2022).AsianPaintshasbeenmaintainingahealthydividendpayoutratioand isexpectedtogivephenomenalreturnstotheinvestors.

2. WHY I CHOSE THIS TOPIC?

IhaveaverykeeninterestinthefieldoffinanceandeconomicswhichiswhyIhadnoticedthattheeconomyhasbeenshook due to challenging events recently, starting from Covid19 to the Russia-Ukraine War. The prices of commodities are skyrocketing,followedbyunemploymentandregressionwhichcausemetopickthistopicbecauseinvestmentisthekeyto solvingalltheseproblems.Ithelpsinwealthgenerationandprovidessecurityforthefutureincasewearefacedwithsuch drasticcircumstancesinthefuture.Itevenhelpsbeatinflation.

PRICE OF GOLD (PER OUNCE) IN DOLLAR

Month SrNo. GOLD

Jan-16 1 1074 Apr-16 2 1223 Jul-16 3 1342 Oct-16 4 1312 Jan-17 5 1150 Apr-17 6 1255 Jul-17 7 1223 Oct-17 8 1271 Jan-18 9 1307 Apr-18 10 1342 Jul-18 11 1242 Oct-18 12 1189 Jan-19 13 1286 Apr-19 14 1287 Jul-19 15 1386 Oct-19 16 1482 Jan-20 17 1518 Apr-20 18 1592 Jul-20 19 1768 Oct-20 20 1904 Jan-21 21 1898 Apr-21 22 1730 Jul-21 23 1776 Oct-21 24 1761 Jan-22 25 1804 Apr-22 26 1925 Jul-22 27 1809

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International Research Journal of Engineering and Technology (IRJET) e-ISSN: 2395-0056

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FD RATES

Month Sr No. FD Jan-16 1 7 Apr-16 2 7 Jul-16 3 7 Oct-16 4 6.5 Jan-17 5 6.5 Apr-17 6 6.5 Jul-17 7 6.25 Oct-17 8 6.25 Jan-18 9 6 Apr-18 10 6.75 Jul-18 11 6.75 Oct-18 12 6.85 Jan-19 13 6.85 Apr-19 14 6.85 Jul-19 15 6.6 Oct-19 16 6.25 Jan-20 17 6.25 Apr-20 18 5.7 Jul-20 19 5.4 Oct-20 20 5.4 Jan-21 21 5.4 Apr-21 22 5.4 Jul-21 23 5.4 Oct-21 24 5.4 Jan-22 25 5.4 Apr-22 26 5.4 Jul-22 27 5.4

2022, IRJET | Impact Factor value: 7.529 | ISO 9001:2008 Certified

International Research Journal of Engineering and Technology (IRJET) e-ISSN: 2395-0056

Volume: 09 Issue: 08 | Aug 2022 www.irjet.net p-ISSN: 2395-0072

SHARE PRICE OF ASIAN PAINTS

Month Sr No. ASIAN PAINTS

Jan-16 1 878.75 Apr-16 2 870 Jul-16 3 1002.5 Oct-16 4 1160.7 Jan-17 5 891.05 Apr-17 6 1073.5 Jul-17 7 1102.95 Oct-17 8 1131.7 Jan-18 9 1158.5 Apr-18 10 1120.4 Jul-18 11 1264.45 Oct-18 12 1293.3 Jan-19 13 1366 Apr-19 14 1492.7 Jul-19 15 1358.15 Oct-19 16 1776.3 Jan-20 17 1812.25 Apr-20 18 1604.15 Jul-20 19 1686.75 Oct-20 20 2040.45 Jan-21 21 775.75 Apr-21 22 2551.75 Jul-21 23 3003.9 Oct-21 24 3177.85 Jan-22 25 3382.95 Apr-22 26 3114.15 Jul-22 27 2773.15

IRJET | Impact Factor value: 7.529 | ISO 9001:2008 Certified

International Research Journal of Engineering and Technology (IRJET) e-ISSN: 2395-0056

Volume: 09 Issue: 08 | Aug 2022 www.irjet.net p-ISSN: 2395-0072

International Research Journal of Engineering and Technology (IRJET) e-ISSN: 2395-0056

Volume: 09 Issue: 08 | Aug 2022 www.irjet.net p-ISSN: 2395-0072

International Research Journal of Engineering and Technology (IRJET) e-ISSN: 2395-0056

Volume: 09 Issue: 08 | Aug 2022 www.irjet.net p-ISSN: 2395-0072

4. EXPLANATION

Foranalyzingthedataofgold,FDratesandstockofAsianPaints,wehavedrawngraphsmanuallyandonexcel.Theslopeof goldgraphisincreasingandisclosetotherightarmoftheparabola.So,takingany3pointsrandomlywehavecalculatedvalue ofa,b,cinquadratic.ThegraphofFDisfallingandthenalmostisconsistentfromJanuary,2020tilldate.Wedidnotrequire graphsforthiscalculationsince weusedtheformulaforCI,onquarterlybasis,whichSBIisfollowingforFDinterest.Graphof AsianPaintsshowsexponentialgrowth(increasing)sowehavetakeny=ab^xandcalculateda,busingtwopoints,verifiedby twomorepoints.DuetoverylargecalculationsIhaveroundedoffsomevaluesupto2decimalplacessoignoringsomemargin oferror,thesecalculationsgiveanideaofappreciation.

5. CONCLUSIONS

Fromtheresearchpaperitisevidentthatallthethreemodesofinvestmentsareprovidingverypromisingreturnsbutthebest graphisthatofthestockofAsianPaints.Theshareofthisparticularcompanypromisesveryglowingreturnsbutitissubjectto varietyofmarketriskssuchasinflation,pandemicandmanymore.Ontheotherhand,goldandfixeddepositsprovideyouwith amoreguaranteedyetnominalreturnofinvestment.Therefore,inmyopinion,diversificationofyourinvestmentportfolio wouldbeextremelybeneficialasitwouldspreadyourmoneyinvariousinvestments,therebyminimizingtherisk.Henceforth itwouldbeadvisabletoinvestingold,FDRandstockofAsianpaintsintheratio2:1:2or1:1:3assomeonerightlysaid“Donot putalltheeggsinonebasket.”

REFERENCES

https://www.screener.in/ https://www.bullion.com https://goldco.com/why-has-investing-in-gold-gained-popularity-in-recent-years/ https://www.investopedia.com/ https://orionmetalexchange.com/ https://www.harvardgeo.org/ https://www.sbi.co.in/ https://www.policybazaar.com/ https://www.bajajfinservmarkets.in/ https://startuptalky.com/ https://www.thebalance.com/ https://www.asianpaints.com/

BIOGRAPHIES

Raavya Jain

Currently studying in Sat Paul Mittal School in class XII Leader of Business Club

Senior Editor of the school newspaper School topper in grade XI

Studied in Welham Girls’ School till grade X Scored 96.8% in ICSE Board exams

State chess winner twice with participation in nationals IPSC Basketball winner Won multiple gold medals in World Scholars’ Cup Distinction certificate from Asset Talent Search

2022, IRJET | Impact Factor value: 7.529 | ISO 9001:2008 Certified Journal

International Research Journal of Engineering and Technology (IRJET) e-ISSN: 2395-0056

Volume: 09 Issue: 08 | Aug 2022 www.irjet.net p-ISSN: 2395-0072

Under the guidance of :

Dr. Mamta Jain

M.Sc(Mathematics) (Double gold medallist)

M.Phil (Computer Applications) with honours

From University of Roorkee (now IIT Roorkee) PhD (Mathematics)

5 papers published in international journals

Former Lead Auditor ISO 9001,ISO 22000 School Accreditation Examiner by QCI 26 years of teaching experience

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