Question

Divide Rs 50,760 into two parts such that if one part is invested in 8% Rs 100 shares at 8% discount and the other in 9% Rs 100 shares at 8% premium, the annual incomes from both the investments are equal.

Answer 1

Total investment = Rs 50760

Let 1st part = Rs y

2nd part = Rs (50760 - y)

For 1st part

Nominal value of 1 share = Rs 100

Market value of 1 share = Rs 100 - 8% of Rs 100

= Rs  100- Rs 8 = Rs  92

∴No. shares purached = `"y"/92` shares

Dividend% = 8%

Dividend on 1 share = 8%  of Rs 100 = Rs 8

Total dividend = `"y"/92 xx "Rs"  8 = "Rs"  (2"y")/23`

For 2nd part

Nominal value of 1 share = Rs 100

Market value of 1 share = `"Rs"  100 + 8% "of  Rs"  100`

= Rs 100 + Rs 8 = Rs 108

∴ No of shares purchased  = `(50760 - "y")/108` share

Dividend% = 9%

Dividend on 1 share = 9%  of Rs 100= Rs 9

Total dividend =`(50760 - "y")/108 xx "Rs"  9` = Rs `(9(50760 - "y"))/108`

Given that both dividend are equal

Then Rs `(2"y")/23 = "Rs" (9(50760 - "y"))/108`

`=> 2"y" xx 108  = 23(456840 - 9"y")`

`=> 216"y"  = 456840  xx 23 - 207"y"`

`=> 423"y" = 456840 xx 23`

`=> "y"= (456840 xx 23)/423 = "Rs"  24840`

1 st part = Rs 24840

2nd part = Rs 50760- Rs 24840 = Rs 25920