A retired man sells out Rs. 7500 of a 10% stock at Rs. 105.50 and invests the proceeds in 14% stock at Rs. 124.50. What is the change in income if he pays a service charge of 0.5% of the face value on each transaction ?
A. Rs. 95
B. Rs. 114
C. Rs. 132
D. None of these
Answer: Option C
Solution(By Examveda Team)
Number of shares sold = $$\frac{7500}{100}$$ = 75Proceeds from sale of Rs. 7500 stock
= Rs. [(105.50 - 0.5) × 75]
= Rs. 7875
Number of new shares purchased
$$\eqalign{ & = \left( {\frac{{7875}}{{124.50 + 0.50}}} \right) \cr & = \left( {\frac{{7875}}{{125}}} \right) \cr & = 63 \cr} $$
Original income
= 10% of Rs. 7500
= Rs. 750
New income
= 14% of Rs. 6300
= Rs. $$\left( {\frac{{14}}{{100}} \times 6300} \right)$$
= Rs. 882
∴ Change in income
= Rs. (882 - 750)
= Rs. 132
Related Questions on Stocks and Shares
In order to obtain an income of Rs. 650 from 10% stock at Rs. 96, one must make an investment of:
A. Rs. 3100
B. Rs. 6240
C. Rs. 6500
D. Rs. 9600
A. $$12\frac{1}{2}$$ %
B. $$13\frac{1}{2}$$ %
C. 15%
D. $$16\frac{2}{3}$$ %
Which is better investment: 11% stock at 143 or $$9\frac{3}{4}$$% stock at 117?
A. 11% stock at 143
B. $$9\frac{3}{4}$$% stock at 117
C. Both are equally good
D. Cannot be compared, as the total amount of investment is not given.
A. Rs. 12
B. Rs. 15
C. Rs. 18
D. Rs. 21
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