Question

A man sold 500 shares of Rs 20, paying 8% at Rs 18 and invested the proceeds in Rs 10 shares paying 12% at Rs 15 . How many Rs 10 shares did he buy and what was the change in his annual income?

Answer 1

Dear student,
$$\begin{gathered} Sellingpriceof500(Rs.20)sharesatRs.18isRs.(500\times 18)=Rs.9000 \\ MarketpriceofRs.10share=Rs.15 \\ So,numberofRs.10sharespurchased=\frac{9000}{15}=600 \\ AnnualincomefromoriginalRs.20shares \\ =Numberofshares\times rateofdividend\times facevalueofoneshare \\ =Rs.(500\times \frac{8}{100}\times 20\}=Rs.800 \\ AnnualincomefromnewRs.10shares \\ =Rs.(600\times \frac{12}{100}\times 10)=Rs.720 \\ Requiredchangeinannualincome(lessincome)is=Rs.(800-720)less=Rs.80less. \\ Regards \end{gathered}$$