Question

A man sells 60 , Rs 15 shares of a company paying 12 % p.a. dividend at Rs 21 each and invested the proceeds in Rs 6share of another company at Rs 9 each . Find his change in income if the second company pays him a dividend of 8%.

Answer 1

$$\begin{gathered} \mathrm{Selling}\mathrm{price}\mathrm{of}60\left(\mathrm{Rs}15\right)\mathrm{shares}\mathrm{at}\mathrm{Rs}21\mathrm{each}=\mathrm{Rs}\left(21\times 60\right)=\mathrm{Rs}1260 \\ \mathrm{Market}\mathrm{price}\mathrm{of}\mathrm{Rs}6\mathrm{share}=\mathrm{Rs}9 \\ \mathrm{So},\mathrm{number}\mathrm{of}\mathrm{Rs}6\mathrm{shares}\mathrm{purchased}=\frac{1260}{9}=140 \\ \mathrm{Dividend}\mathrm{on}1\mathrm{share}\mathrm{of}\mathrm{Rs}15=12\%\mathrm{of}\mathrm{Rs}15=\frac{12}{100}\times 15=\mathrm{Rs}\left(\frac{9}{5}\right) \\ \mathrm{Income}\mathrm{on}60\left(\mathrm{Rs}15\mathrm{shares}\right)=\mathrm{Rs}\left(\frac{9}{5}\times 60\right)=\mathrm{Rs}108 \\ \mathrm{Dividend}\mathrm{on}1\mathrm{share}\mathrm{of}\mathrm{Rs}6=8\%\mathrm{of}\mathrm{Rs}6=\frac{8}{100}\times 6=\mathrm{Re}0.48 \\ \mathrm{Income}\mathrm{on}140\left(\mathrm{Rs}6\right)\mathrm{shares}=0.48\times 140=\mathrm{Rs}67.20 \\ \mathrm{Change}\mathrm{in}\mathrm{annual}\mathrm{income}=\mathrm{Rs}108-\mathrm{Rs}67.20=\mathrm{Rs}40.80\left[\mathrm{decrease}\right] \end{gathered}$$