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A Man Sold 400 (Rs 20) Shares of a Company, Paying 5% at Rs 18 and Invested the Proceeds in (Rs 10) Shares of Another Company Paying 7% at Rs 12. How Many (Rs 10) Shares Did He Buy and What Was Th - ICSE Class 10 - Mathematics

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Question

A man sold 400 (Rs 20) shares of a company, paying 5% at Rs 18 and invested the proceeds in (Rs 10) shares of another company paying 7% at Rs 12. How many (Rs 10) shares did he buy and what was the change in his income?

Solution

1st case

Nominal value of 1 share = Rs 20

Nominal value of 400 shares = Rs 20 x 400= ₹ 8,000

Market value of 1 share = ₹ 18

Market value of 400 shares = ₹ 18 x 400= ₹ 7,200

Dividend% = 5%

Dividend = 5% of Rs 8,000

2nd case

Nominal value of 1 share = Rs 10

Market value of 1 share = Rs 12

∴ No of shares purchased =  `7200/12 = 600` shares

Nominal value of 600 shares = Rs 10 x 600 = Rs 6,000

Dividend% = 7%

Dividend = 7% of Rs 6,000

`= 7/100 xx 6000 = "Rs"  420`

Annual change in income = Rs 420 – Rs 400

= Rs 20 increase

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Solution A Man Sold 400 (Rs 20) Shares of a Company, Paying 5% at Rs 18 and Invested the Proceeds in (Rs 10) Shares of Another Company Paying 7% at Rs 12. How Many (Rs 10) Shares Did He Buy and What Was Th Concept: Shares and Dividends.
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