an important question from the book -ML aggarwal( avichal publication)class 10th , chapter3, shares and dividends ……..
it is given that A man invests Rs 10080 in 6% hundred- rupee shares at Rs. 112.
and we are asked to Find his annual income.
second condition is also that “When the shares fall to Rs. 96 he sells out the shares and invests the proceeds in 10% ten-rupee shares at Rs. 8”. so we have to Find the change in his annual income.
please solve both the sub-questions in separately manner.
Q no. 24, exercise 3, ML Publication, share and dividends
Face value of each share = Rs 100
Market value of each share = Rs 112
Money invested by man = Rs 10080
& Rate of dividend = 6%
∴ Number of shares bought by him = Money invested/Market value of one share
= 10080/112 = 90
Now, annual income on one share = 6100 × 100 = Rs 6
Therefore, annual income on 90 shares = Rs (90 × 6) = Rs 540
In 2nd case:
Money received by him on selling one share = Rs 96
then money received by him on selling 90 shares = Rs (90 × 96) = Rs 8640
Hence, money invested by him in 2nd case = Rs 8640
Now, Face value of each new share = Rs 10
Market value of each new share = Rs 8
& Rate of dividend = 10%
Hence, number of shares he bought in 2nd case = 86408 = 1080
Now, income on one share = 10 × 10100 = Re 1
then income of 1080 shares = Rs (1080 × 1) = Rs 1080
Hence, the change in his annual income = Rs 1080 − Rs 540 = Rs 540