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Question
A person sells ₹ 2400 of 6% stock at 80 and invests the proceeds in 8% stock at 96. Find the change in his dividend income.
Sum
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Solution
Given:
Original stock: ₹ 2400 in 6% stock at ₹ 80
New stock: Invests proceeds in 8% stock at ₹ 96
Objective: Find the change in dividend income
Original dividend:
= 6% of ₹ 2400
`=6/100xx2400`
= ₹ 144
Sale proceeds:
`= (2400/100) xx80`
= ₹ 1920
Nominal value:
`=(1920/96)xx100`
= ₹ 2000
New dividend:
= 8% of ₹ 2000
`=8/100xx2000`
= ₹ 160
Change = ₹ 160 − ₹ 144
= ₹ 16 (increase)
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