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Question
Mahesh bought 600 shares of Rs 50 each of 'Excel Computers'. He sold one third of them when they were at a premium of Rs 20 and the remaining when they were at a discount of Rs 5. Find his gain or loss in the transaction.
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Solution
No. of shares = 600
Nominal value of a share =Rs 50
Investment by Mahesh =Rs (50 x 600) =Rs 30,000
Shares sold at premium = `1/3` x 600 = 200
Market value ofa share with Premium= Rs (50 + 20) =Rs 70
Value of 200 shares= Rs (70 x 200) =Rs 14,000 ............ (i)
Shares sold at discount= 600 - 200 = 400
Market value of a share with discount = Rs ( 50 - 5) = Rs 45
Value of400 shares= Rs (45 x 400) =Rs 18,000 ............ (ii)
Adding ( i) and (ii), gives total money Mahesh received by selling his shares = Rs ( 14,000 + 18,000) = Rs 32,000
Difference in selling price and cost price =Rs (32,000 -30,000) =Rs 2,000
Hence, Mahesh gained Rs 2,000
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