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Question
Which in better investment: 7% Rs. 100 shares at Rs.120 or 8% Rs. 10 shares at Rs. 13.50.
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Solution
Case I.
Income on ₹120 = 7% of ₹ 100
= `(7 xx 100)/(100)`
= ₹ 7
So Income on ₹ 1 = ₹`(7)/(120)` = ₹ 0·058
Case II.
Income on ₹ 13·50 = 8% of ₹ 10
= `(8 xx 10)/(100)`
= ₹`(8)/(10)`
So Income on ₹ 1
= ₹`((8)/(10))/(13·50)`
= ₹ 0·059
We find that investment in the second case os better than investment in the first case.
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