Question

A man holding ₹ 45000 of 3% stock sells out when the stock is standing at 95 and invests the proceeds in 5% stock at 114. What is the change in his income?

Answer 1

Given:

He holds ₹ 45000 nominal value of 3% stock

Sells at ₹ 95

Invests in 5% stock at ₹ 114

Income:

= 3% of ₹ 45000

`=3/100xx45000`

= ₹ 1350

Sale amount:

`=(45000/100)xx95`

= ₹ 42750

Nominal value:

`=(42750/114)xx100`

= ₹ 37500

Income

= 5% of ₹ 37500

`=5/100xx37500`

= ₹ 1875

Change:

= ₹ 1875 − ₹ 1350

= ₹ 525