A man bought 360 ten-rupee shares paying 12% per annum. He sold them when the price rose to Rs 21 and invested the proceeds in five0rupee shares paying $4(1/2)$ % per annum at Rs 3.5 per share. Find the annual change in his income.
Answer & explanation
Correct answer: option 4
The correct answer is option (4) :₹54
Dividend received on 1 share $=₹\frac{12}{100}×10$
∴ Dividend received on 360 shares $= ₹(1.2×360)$
$=₹432$
Man sold his shares at ₹21 each the sale value of his shares
$=₹(21 ×360)$
$= ₹ 7560$
He invested the proceeds in ₹5 share at 3.5 each.
∴ No. of shares purchased $=\frac{₹7560}{₹3.5}=2160$
Dividend received on 1 shares of $₹3.5=₹\left(\frac{4.5}{100} ×5\right)$
$=₹0.225$
Dividend received on 2160 shares $=₹(0.225×2160)$
$=₹486$
∴ Change is annual income $=₹486-₹432$
$=₹54$