Question

Peter invests Rs. 5,625 in a company paying 7% per annum when a share of Rs. 10 stands for Rs.12.50. Find Peter's income from this investment.
If he sells 60% of these shares for Rs. 10 each, find his gain or loss in this transaction.

• A. Rs. 675
• B. Rs. 674
• C. Rs. 673
• D. Rs. 672

Answer 1

Answer: (A)

Rs. 675

Since Market value of each share=Rs.12.50 and the sum invested is Rs.5625

$\therefore$No.of share=$\frac{Suminvested}{M.Vof1share}$

$\Rightarrow \frac{5625}{12.50}=450$

Dividend on 1 share=7% of Face value$=\frac{7}{100}\times 10=Rs..7$

$\therefore$Total income$=.7\times 250=Rs.315$

If he sell 60% of these share for Rs.10 each

$\therefore$60% of 250$=\frac{60}{100}\times 450=270$

Then S.P of 270 share for Rs.10 each$=270\times 10=Rs.2700$

S.P of 270 share for Rs.12.50=$270\times 12.50=Rs.3375$

$\therefore Loss=3375-2700=Rs.675$