Question

At what price should a 6.25% Rs. 100 shares be quoted when the money is worth 5%?

Answer 1

Interest on Rs. 100 worth = Rs. 5
If interest is Rs. 5, then market value = Rs. 100
and if interest is Rs. 6.25, then market value

= `(100)/(5) xx 6.25`

= `(100 xx 625)/(5 xx 100)`
= 125
Market value of each share = Rs. 125.