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Sachin invests Rs 8500 in 10%, Rs 100 shares at Rs 170. He sells the shares when the price of each share rises by Rs 30. He invests the proceeds in 12% Rs 100 shares at Rs 125. Find : (i) the sale proceeds. (ii) the number of Rs 125 shares he buys. (iii) the change in his annual income. |
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Answer» Total investment = Rs 8500 Market value of each share = Rs 170 Number of shares purchased = 8500/170 = 50 Dividend received = Rs (10/100) × 50 × 100 = Rs 500 Now, market value of each share = Rs (170 + 30) = Rs 200 (i) Amount received on selling = Rs (50 x 200) = Rs 10000 Market value of new shares = Rs 125 each (ii) Number of shares purchased = 10000/125 = 80 Dividend received = (12/100) × 80 ×100 = Rs 960 (iii) Change in income = Rs (960 – 500) = Rs 460 |
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