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

So,

• Sastry recieves a better percentage of yield.

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