Question

At what price should a 6.25%rupèss 100 share be quoted when the money is worth 5%

Answer 1

Answer: Rs.125 has to be invested to get a return of 5 % for a share of 6.25%.

Solution:

6.25% of Rs.100 = $\frac{6.25}{100} \times 100$ =Rs.  6.25

6.25% share on Rs.100 is equal to Rs.6.25, Income = Rs.6.25

Money worth is 5%, hence return % = 5

To find the money invested the below formula is used in which return percentage is calculated from the income and invested money which needs to be found in the problem.

Return %      =$\frac{\text { Income }}{\text { lnvestment }} \times 100$  

          5        =$\frac{6.25}{\text { Investment }} \times 100$

Investment  =$\frac{6.25}{5} \times 100=1.25 \times 100$ = 125