#### Question

Peter invests Rs. 5,625 in a company paying 7% per annum when a share of Rs. 10 stands from Rs. 12.50. Find Peter’s income from this investment.

If he sells 60% of these shares from Rs. 10 each, find his gain or loss in this transaction.

#### Solution

i) Total investment = Rs. 5,625

Nominal value of 1 share = Rs. 10

Market value of 1 share = Rs. 12.50

∴ No of shares purchased =`(5,625)/12.50` = 450 shares

Nominal value of 450 shares = Rs. 10 × 450 = Rs. 4,500

Dividend% = 7%

Dividend = 7% of Rs. 4,500

= `7 /100`×4,500 = 𝑅s. 315

(ii)

No. of shares sold = 60% of 450 = 270

Sale price of 270 shares = Rs10 × 270 = Rs. 2,700

Purchase price of 270 shares= Rs12.50 × 70 = Rs. 3,375

His loss = Rs. 3,375 – Rs. 2,700 = Rs. 675 Ans.

Is there an error in this question or solution?

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Peter Invests Rs. 5,625 in a Company Paying 7% per Annum When a Share of Rs. 10 Stands from Rs. 12.50. Find Peter’S Income from this Investment. If He Sells 60% of These Shares from Rs. 10 Each, Concept: Shares and Dividends Examples.

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