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Question
Vivek invests Rs 4500 in 8%. Rs. 10 shares at Rs. 15. He sells the shares when the price
rises to Rs. 30, and invests the proceeds in 12% Rs. 100 shares at Rs. 125. Calculate.
(1) the sale proceeds
(2) the number of Rs. 125 shares he buys.
(3) the change in his annual income from dividend.
Solution
1) Number of Rs.15 shares bought = `4500/15 = 300`
Total FV.of shares= F.V of each share x No. of shares = 300 xx 10 = Rs 3000
Dividend = 8% of total F.V = `8/100 xx 3000` = Rs 240
S.P of shares = `300 xx 30 = Rs 9000`
Investment = Rs 9000
2) The number of Rs. 125 shares = `9000/125 = 72`
3) Total FV of Rs. 100 shares = Rs. 72 × 100 = Rs. 7200
New dividend = `12/100 xx 7200 = Rs 864`
The change in his annual income from dividend = Rs. 864 – Rs. 240 = Rs. 624
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