Question

a man sold 500 shares of rupees 20 each paying 8% at Rs 18 and invested the proceeds in rupees 10 shares paying 12% at rupees 15 how many rupees 10 shares did he buy and what was the change in his annual income

Answer 1

Answer:

Step-by-step explanation:

Answer 2

Number of 10 rupees shares bought by the man is 600, and his annual income decreases by Rs. 80 .

i) • Given,

Number of shares = 500

Nominal value of each share (N.V.)  = Rs. 20

=> Nominal value of 500 shares = 500 × Rs. 20 = Rs. 10,000

• Given,

Market value of each share (M.V.) = Rs. 18

=> Market Value of 500 shares = 500 × Rs. 18 = Rs. 9000

• Percentage of dividend = 8%

=> Dividend Amount = (8/100) × N.V.

=> Dividend Amount = (8/100) × Rs. 10,000

=> Dividend Amount = Rs. 800

ii) • Now, the proceed is invested in Rs. 10 shares

=> Nominal Value of each share (N.V.) = Rs. 10

• Market Value  of each share (M.V.) = Rs. 15

M.V. of 500 shares = 9000 (from case (i) )

• Therefore, number of 10 rupees shares that can be bought at M.V. = 9000 / 15 = 600

• Now, nominal value of 600 shares = Rs. 10 × 600 = Rs 6000

• Percentage of Dividend  = 12%

=> Dividend Amount = 12% of N.V.

=> Dividend Amount = (12/100) × Rs. 6000

=> Dividend Amount = Rs. 720

• Therefore, the annual income decreases by Rs. 800 - Rs. 720 = Rs. 80