Question

Gopal invested ₹ 8,000 in 7% of ₹ 100 shares at ₹ 80. After a year he sold these shares at ₹ 75 each and invested the proceeds (including his dividend) in 18% for ₹ 25 shares at ₹ 41. Find

1. his dividend for the first year
2. his annual income in the second year
3. The percentage increase in his return on his original investment

Answer 1

i. Given Investment = 8000

M.V. = 80

Rate = 7%

No. if shares = `"Investment"/("M"."V".) = 8000/80` = 100

Dividend = No. of shares × F.V. × Rate percentage

= `100 xx 100 xx 7/100`

= ₹ 700

ii. Selling price of 1 share = ₹ 75

Selling price of 100 shares = 75 × 100 = 7500

Investment = Selling Price + Dividend

= 7500 + 700

= ₹ 8200

∴ Income = `"Investment"/("M"."V".) xx "F"."V" xx "Rate percentage"`

= `8200/41 xx 25 xx 18/100`

= `200 xx 25 xx 18/100`

= ₹ 900

iii. Increase in return = 900 − 700 = ₹ 200 ......[From (i) and (ii)]

Percentage of increase in return = `"Increase in return"/"Investment" xx 100`

= `200/8000 xx 100`

= `20/8`

= 2.5%