Question

Karan sold x shares of rs. 100 paying 10% dividend at a discount of 25% and invested the proceeds in rs 100 shares paying 16% dividend, quoted at rs 80 and thus increased his income by rs 2000. Find the value of x.

Answer 1

Value of x is 400.

Step-by-step explanation:

Karan sold the number of shares = x

Rate of dividend = 10%

Nominal value = 100 Rs.

Annual income from dividend = $\frac{10}{100}\times 100(x)$

                                                  = 10x  --------(1)

each share sold at a discount of 25%.

selling price of each share = 100 -(25% × 100)

                                            = 100 - 25

                                            = 75 Rs.

selling price of x shares = 75x

Given that Market value = 80 Rs.

Nominal value = 100

Rate of dividend = 16%

Annual income from dividend = $\frac{16}{100}\times 100 \times \frac{75x}{80}$

                                                   =  15x -------------(2)

Given that annual income increased by Rs. 2000. Therefore,

15x - 10x = 2000

5x = 2000

$x=\frac{2000}{5}$

x = 400 Rs.

Value of x is 400.

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