Question

A man sold 400 (Rs.20) shares of a company, paying 5% at Rs.18 and invested the proceeds in (Rs.10) shares of another company paying 7% at Rs.12. How many (Rs.10) shares did he buy and what was the change in his income ?

Answer 1

Total nominal value of 400 shares at Rs. 20 per share=$400\times 20=Rs.8000$

$\therefore$Dividend=5% of Rs.8000=$\frac{5}{100}\times 8000=Rs.400$

He sell shares at Rs.18 per share

$\therefore$Sales proceed$=400\times 18=Rs.7200$

He invest this amount in buying shares (Rs.10) at Rs.12 per share

$\therefore$No. of share$=\frac{7200}{12}=600$

$\therefore$N.V of 600 shares=$600\times 10=Rs.6000$

His income=7% of 6000$=\frac{7}{100}\times 6000=Rs.420$

Change in his income$=420-400=Rs.20$