Question

6. Shobhanatai invested 18,000 to purchase
shares of FV 10 at a discount of 10%. How
many shares did she purchase? She sold all the
shares when the MV was at a premium of 2.
What was her profit?​

Answer 1

Answer:

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Answer 2

Given:

(i) Shobhanatai invested Rs 18000 to purchase shares having face value (FV) of Rs 10

(ii) She did it at a discount of 10%

(iii) Later, she sold all the shares when the Market Value (MV) was at a premium of Rs 2.

To find:

(i) Number of shares she purchased

(ii) Her profit later

Solution:

Given, her investment was Rs 18000.

Again, the FV is Rs 10.

She purchased the shares at a discount of 10%.

So, MV of 1 share = (100-10)% of FV

= 90% of Rs 10

= Rs 9

We know that, number of shares = $\frac{Total investment}{MV of 1 share}$

= $\frac{18000}{9}$

= 2000

Again, MV was at a premium of Rs 2.

So, MV of 1 share = Rs 2 + FV

= Rs (2+10)

= Rs 12

So, on selling 2000 shares, at a MV of Rs 12, it would be

= Rs (12*2000)

= Rs 24000

Total profit = Selling price - Investment

= Rs (24000-18000)

= Rs 6000

So, she purchased 2000 shares and her total profit was Rs 6000.