Question

Vimal sold a certain number of ₹20 shares, paying 8% dividend, at ₹18 and invested the proceeds in ₹10 shares, paying 12% dividend, at 50% premium. If his annual dividend income decreases by ₹120, find the number of shares sold by Vimal

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Answer 1

Answer: 750

Step-by-step explanation:

let's say that he sold n shares.

the amount he received = n x 18 rupees

now he buys 10 rupees share at 50% premium, means at rate of 15 rupees

hence the number of shares bought = (n x 18) ÷ 15 = 6n/5

the total dividend = percentage x face value of share x number of shares

Now, the dividend of sold shares= 8 % of 20 x n = 0.08 x 20n= 1.6n

and the dividend of the bought shares= 12% of 10 x (6n/5) = 0.12 x 12n=1.44n

the difference is 120. hence, 1.6n-1.44n = 120

⇒ 0.16n = 120

⇒ n = 120/0.16 = 750