Question

A man bought 360, ten-rupee shares of a company, paying 12 percent per annum. He sold the shares when their price rose to Rs 21 per share and invested the proceeds in five-rupee shares paying 4.5 percent per annum at Rs 3.50 per share. Find the annual change in his income.

Answer 1

number of shares = 360

NV of one share = Rs. 10, % dividend =12% per annum

total NV of 360 shares = Rs. 360$\times$10 = Rs. 3600

therefore dividend = 12% of Rs. 3600

$=3600\times \frac{12}{100}=Rs432$

selling price of 1 share = Rs. 21

he invested amount = Rs. 21$\times$360 = Rs. 7560

number of shares = $\frac{7560}{3.5}=2160$

NV of 2160 shares = Rs. 2160$\times$5 = Rs. 10800

% dividend = 4.5%

dividend = 4.5% of Rs. 10800

$=10800\times \frac{4.5}{100}=Rs486$

therefore change in income = Rs 486 - Rs. 432

= Rs. 54