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Question
At what price should a 6.25% Rs. 50 share be quoted when the money is worth 10%?
Solution
Interest on Rs. 100
worth = Rs. 10
If the interest is Rs. 10, then market value = Rs. 100
and if interest is Rs. 6.25, then market
value = `(50 xx 6.25)/(10)`
= `(50 xx 625)/(10 xx 100)`
= Rs. 31.25.
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