Question

Arun invested Rs 9000 in 6% Rs 100 shares at Rs 90. After a year he sold these shares at Rs 85 each and invested the proceeds (including his dividend) in 18% Rs 20 shares at Rs 50. Find:
(i) His dividend for the first year;
(ii) His annual income in the second year;
(iii) The percentage increase in his return on his original investment.
(i) Rs 600
(ii) Rs 655.20
(iii) 0.61%

Answer 1

Given that
Arun invested Rs. 9000 in 6% Rs. 100 shares at Rs. 90.
Number of shares he bought $=\frac{Totalinvestment}{Marketvalueofeachshare}=\frac{900}{90}=100shares$

(i) his dividend for first years $=\frac{6}{100}\times 100\times 100=Rs.600$

(ii) He sold his shares at Rs. 85 and invested the proceeds (including his dividend) in 18% Rs.20
Shares at Rs. 50
Total Amount $=100\times 85+600=Rs.9100$
No. of shares bought $=\frac{9100}{50}=182$
Annual dividend $=\frac{18}{100}\times 182\times 20=Rs.655.2$
(iii) Increase in his income = $655.2-600=Rs.55.2$
$\therefore$ percentage increase in original investment $=\frac{55.5}{9000}\times 100=0.613\%$