Question

Vivek invests Rs 4500 in 8%. Rs. 10 shares at Rs. 15. He sells the shares when the price
rises to Rs. 30, and invests the proceeds in 12% Rs. 100 shares at Rs. 125. Calculate.
(1) the sale proceeds
(2) the number of Rs. 125 shares he buys.
(3) the change in his annual income from dividend.

Answer 1

1) Number of Rs.15 shares bought = `4500/15 = 300`

Total FV.of shares= F.V of each share x No. of shares = 300 xx 10 = Rs 3000

Dividend = 8% of total F.V = `8/100 xx 3000` =  Rs  240

S.P of shares = `300 xx 30 =  Rs  9000`

Investment  = Rs  9000

2) The number of Rs. 125 shares = `9000/125 = 72`

3) Total FV of Rs. 100 shares = Rs. 72 × 100 = Rs. 7200

New dividend = `12/100 xx 7200 =  Rs  864`

The change in his annual income from dividend = Rs. 864 – Rs. 240 = Rs. 624