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 was the change in his income ?

Answer 1

Divident per (Rs 20) share = $Rs20\times \frac{5}{100}=Rs1$

$\therefore$ dividend from 400 (Rs 20) shares = $1\times 400=Rs.400$

Selling price(SP) of 400(Rs.20) shares at Rs.18 each = $18\times 400=Rs.7200$

$\therefore$ No of (Rs.10) shares purchased at Rs 12 each = $\frac{7200}{12}=600$

Dividend per (Rs.10) share = $10\times \frac{7}{100}=rs.\frac{7}{10}$

$\therefore$ dividend from 600(Rs.10) shares =$\frac{7}{10}\times 600=Rs.420$

$\therefore$ change in income = 420 - 400 = Rs.20 (Gain)