Question

Vivek invests ₹ 4500 in 8 % , ₹ 10 shares at ₹ 15. He sells the shares when the price rise to 30 and invests the proceeds in 12 %, ₹ 100 shares at ₹ 125.

Calculate (i) the sale proceeds

(ii) the number of ₹ 125 shares he buys

(iii) the change in his annual income from dividend

• A. i) ₹ 90,000 (ii) 720 (iii) ₹ 800
• B. i) ₹ 9500 (ii) 82 (iii) ₹ 754
• C. i) ₹ 9000 (ii) 72 (iii) ₹ 624
• D. i) ₹ 8000 (ii) 62 (iii) ₹ 824

Answer 1

The correct option is C

i) ₹ 9000 (ii) 72 (iii) ₹ 624

Given that Amount Invested = ₹ 4500

M.V of each share = ₹ 15
Number of shares bought = $\frac{4500}{15}$
= 300
i) The shares were sold when it the price rose to ₹ 30
Hence the sale proceed = 30 x 300
= ₹ 9000

ii)
M.V of the new share = ₹ 125

Hence number of shares bought = $\frac{AmountInvested}{M.Vofeachshare}$
= $\frac{9000}{125}$
= 72

iii) For the first investment
The dividend of the first investment = 8 % ; N.V = ₹ 10 ; Number of shares = 300

Hence the annual income = Dividend % x N.V x Number of shares
= $\frac{8}{100}$ $\times$ 10 $\times$ 300
= ₹ 240

For the second investment
The dividend of the first investment = 12 % ; N.V = ₹ 100 ; Number of shares = 72

Hence the annual income = Dividend % x N.V x Number of shares
= $\frac{12}{100}$ $\times$ 100 $\times$ 72
= ₹ 864

Change in annual income = 864 - 240
= ₹ 624