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# Govind Invested Rs. 19,200 in 15% Rs 100 Shares at 20% Premium. After a Year, He Sold These Shares at Rs. 140 Each and Invested the Proceeds (Including His Dividend) in 20%, Rs. 20 Shares at Rs. 16. - ICSE Class 10 - Mathematics

#### Question

Govind invested Rs. 19,200 in 15% Rs 100 shares at 20% premium. After a year, he sold these shares at Rs. 140 each and invested the proceeds (including his dividend) in 20%, Rs. 20 shares at Rs. 16. Find:

i) The dividend for the first year.
(ii) Her annual income in the second year.
(iii) The percentage change in his return on her original investment.

#### Solution

1st case
Nominal value of 1 share = Rs. 100
Market value of 1 share = Rs. 100 + 20% of Rs. 100
= Rs. 100 + Rs. 20 = Rs. 120
Total investment = Rs. 19,200
∴ No of shares purchased = (19,200) /120= 160 shares
Nominal value of 160 shares= Rs100 x 160= Rs. 16,000
Dividend% = 15%
Dividend = 15% of Rs. 16,000

= 15/100×16,000 = Rs. 2,400

He sold 160 shares in = Rs. 140 × 160 = Rs. 22,400

2nd case
Total investment in 2nd year = Rs. 22,400 + Rs. 2,400
= Rs. 24,800
Nominal value of 1 share = Rs. 20

Market value of 1 share = Rs. 16
∴ No of shares purchased = (24,800)/16 = 1550 shares
Nominal value of 1,550 shares = Rs. 20 × 1550 = Rs. 31,000
Dividend% = 20%
Dividend = 20% of Rs. 31,000

= 20/100×31,000 = 𝑅s. 6,200

Annual change in income = Rs. 6,200 – Rs. 2,400 = Rs. 3,800
The percentage change in his return on his original investment = (3,800)/(19,200)×100% = 475 /24 % = 19 19/24%

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Solution Govind Invested Rs. 19,200 in 15% Rs 100 Shares at 20% Premium. After a Year, He Sold These Shares at Rs. 140 Each and Invested the Proceeds (Including His Dividend) in 20%, Rs. 20 Shares at Rs. 16. Concept: Shares and Dividends.
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