Sameer invests Rs. 5625 in a company paying 7% per annum when the share of Rs. 10 stands for Rs.12.50. Find Sameer’s income from this investment. If he sells 60 % of these shares for Rs.10 each, find his gain or loss in this transaction.

#### Solution

Given:

Face value of the share (F.V.) = ₹ 10

The market value of the share (M.V.) = ₹ 12.5

Amount invested in shares = ₹ 5625

∴ Number of shares purchased by Sameer

= `5625/12.5 = 450`

Dividend = 7%

Annual income from one share = `7/100 xx 10`

= ₹ 0.7

∴ Sameer’s income from this investment = number of shares × annual income from one share

= 450 × 0.7 = ₹ 315

Sameer sells 60 % of these shares i.e. `60/100 xx 450 = 270` shares

Sameer purchased these shares at ₹ 12.5 per share.

∴ The purchase price for these shares = 270 × 12.5

= ₹ 3375

If he sells these shares at ₹ 10 per share, he would receive 270 × 10 = ₹ 2700

∴ In this transaction, Sameer would incur a loss of 3375 - 2700 = ₹ 675