Question

45. a) Kamal sold Rs.9,000 worth 7% stock at 80 and invested the proceeds in 15% stock
at 120. Find the change in income.
​

Answer 1

The change in income is = Rs. 337.5

We have two cases,  

Case – 1,

Kamal has an investment of Rs. 9000, by selling the shares worth 7% at Rs. 80

So we have,

⇒ Rate of return per annum = Annual income from an investment of Rs 100.  

⇒ (Income ÷ Investment) * 100% = (dividend ÷ Market value) * 100%  ----(i)

Let the income be ‘x’ for case – 1.

 dividend = 7% , Market value(MV) = Rs. 80

 ⇒ (x ÷ 9000) * 100% = (7 ÷ 80) * 100%

       x = (70 * 90) ÷ 8    ⇒  x = 6300 ÷ 8

⇒  Income = x = Rs. 787.5 -----(ii)

Now,  Case - 2

For case - 2, we have,

dividend = 15% , MV = Rs. 120 , Investment = Rs. 9000

Let the income be ‘x’ for case – 1.

From eq. - (i),

⇒ (x ÷ 9000) * 100% = (15 ÷ 120) * 100%

⇒ x = 9000 ÷ 8       ⇒  x = Rs. 1125

⇒ Income = Rs. 1125 ----- (iii)

⇒ Change in income = 1125 - 787.5

                            Ans. = Rs. 337.5