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Question
A man invests ₹ 1426 in 5% stock at 115. He sells this stock at 125 and invests the proceeds in 3% stock at 93. Find the change in his income.
Sum
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Solution
Given:
Initial investment = ₹ 1426 in 5% stock at ₹ 115
He sells it at ₹ 125 and reinvests in 3% stock at ₹ 93
Nominal value:
`=(1426/115)xx100`
= ₹ 1240
Income:
= 5% of ₹ 1240
`=5/100xx1240`
= ₹ 62
Sale proceeds:
`= (1240/100)xx125`
= ₹ 1550
Nominal value:
`=(1550/93)xx100`
= ₹ 1666.67
Income
= 3% of ₹ 1666.67
`=3/100xx1666.67`
= ₹ 50
Change
= ₹ 50 − ₹ 62
= ₹ −12
Annual income decreased by ₹ 12.
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