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 45 per cent per annum at Rs.3.50 per share. Find the annual change in his income.

Answer 1

In the 1st case-

No of shares $=360$

N.V of 1 share $=Rs.10$

Rate of dividend $=12$

$\therefore$Income on 1 share $=12$ of $10$ $=\frac{12}{100}\times 10=Rs.1.2$

$\Rightarrow$Total income$=360\times 1.2=Rs.432$

Now he sell all the shares for Rs.21 each

$\therefore$Money obtained by selling all the 360 shares$=360\times 21=Rs.7560$

In the 2nd case-

Sum invested $=Rs.7560$

N.V of 1 share $=Rs.5$

Rate of dividend $=4.5$%

M.V of 1 share $=Rs.3.50$

$\therefore$No. of share=$\frac{7560}{3.50}=2160$

Dividend on $1$ share $=4.5$% of Rs. $5$ $=\frac{4.5}{100}\times 5=Rs.225$

$\Rightarrow Totalincome=2160\times .225=Rs.486$

$\therefore$Change in income$=Rs.486-Rs.432=Rs.54$