#### Question

Gagan invested Rs 80% of his savings in 10% Rs 100 shares at 20% premium and the rest of his savings in 20% Rs 50 shares at Rs 20% discount. If his incomes from these shares is Rs 5,600 calculate:

(1) His investment in shares on the whole

(2) The number of shares of first kind that he bought

(3) Percentage return, on the shares bought on the whole.

#### Solution

1) Let the total saving be Rs x.

For 1 st part:

N.V of each share = Rs 100

M.V of each share = `100 + 20/100 (100) = Rs 120

Number of shares bought = `(0.8x)/120` ....(Investment = Rs x)

Dividend on each share = 10% of 100 = Rs 10 ...(Rate = 10%)

Total dividend = `10 xx (0.8x)/120 = Rs (0.8x)/12`

For 2nd part

N.V of each share = Rs 50

M.V of each share = `50 - 20/100 (50) = Rs 40`

Number of shares bought = `(0.2x)/40` ...(Investment = Rs x)

Dividend on each shares = 20% of 50 = Rs 10 ....(Rate =20%)

Total dividend = `10 xx (0.2x)/40 = (0.2x)/4`

Given that dividends (incomes) from both the investment are is Rs 5600

`=> (0.8x)/12 + (0.2x)/4 = 5600`

`=> (0.8 + 0.6x)/12 = 5600`

`=> x = (5600 xx 12)/(1.4)`

=> x = 48000

Thus his investment in shares on the whole is Rs 48000

1) So number of shares bought = `(0.8x)/120 = (0.8 xx 48000)/120 = Rs 320`

2) The total dividend (return) = `(0.8x)/12 + (0.2x)/4`

`= (0.8 (48000))/12 + (0.2(48000))/4`

= 0.8 x 4000 + 0.2 x 12000

= Rs 5600

Percentage return= `5600/48000 xx 100 = 11 2/3%`