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Question
Sameer invests Rs. 5625 in a company paying 7% per annum when the share of Rs. 10 stands for Rs.12.50. Find Sameer’s income from this investment. If he sells 60 % of these shares for Rs.10 each, find his gain or loss in this transaction.
Solution
Given:
Face value of the share (F.V.) = ₹ 10
The market value of the share (M.V.) = ₹ 12.5
Amount invested in shares = ₹ 5625
∴ Number of shares purchased by Sameer
= `5625/12.5 = 450`
Dividend = 7%
Annual income from one share = `7/100 xx 10`
= ₹ 0.7
∴ Sameer’s income from this investment = number of shares × annual income from one share
= 450 × 0.7 = ₹ 315
Sameer sells 60 % of these shares i.e. `60/100 xx 450 = 270` shares
Sameer purchased these shares at ₹ 12.5 per share.
∴ The purchase price for these shares = 270 × 12.5
= ₹ 3375
If he sells these shares at ₹ 10 per share, he would receive 270 × 10 = ₹ 2700
∴ In this transaction, Sameer would incur a loss of 3375 - 2700 = ₹ 675
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