Question

Sastry invests half his salary in 4% stock at 95
and the other half in 8% stock at 105. Sharma
invests the same amounts . in 4% stock at
90 and 8% stock at 110. Who receives a better
percentage yield?​

Answer 1

Given: Sastry invests half his salary in 4% stock at 95  and the other half in 8% stock at 105. Sharma  invests the same amounts . in 4% stock at  90 and 8% stock at 110.

To find: Who receives a better  percentage yield?​

Solution:

• Now let the total amount be :

               2 x 95 x 105 x 90 x 110

• Now sastry makes :

               (4 x 105 x 90 x 110 ) + (8 x 95 x 90 x 110)

               90 x 110 x 4 (105 + 190)

• So the rate of return will be:

               (295 x 90 x 110 x 4 / 2 x 95 x 105 x 90 x 110 ) x 100

               5 x 9/100

• Now sharma makes:

               (4 x 105 x 95 x 110 ) + (8 x 105 x 95 x 90)

               (110 + 180) x 4 x 105 x 95

• So the rate of return will be:

               ( 290 x 4 x 105 x 95 / 2 x 110 x 90 x 95 x 10 ) x 100

               5 x 8 / 100

Answer:

           So sastry receives a better  percentage yield.