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A man invested Rs. 26000 in 5% stock at 104. He sold the stock when the price rose to Rs. 120 and invested the sale proceeds in 6% stock. By doing this his income increased by Rs. 2500. At what price did he purchase the second stock?
- a)Rs. 125
- b)Rs. 48
- c)Rs. 24
- d)None of these
Correct answer is option 'B'. Can you explain this answer?
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Verified Answer
A man invested Rs. 26000 in 5% stock at 104. He sold the stock when th...
Assuming that face value of the first stock = Rs.100 as it is not given in the question
Since it is a 5% stock, we can take the dividend per stock = Rs.5
Market Value of the first stock = Rs.104
Investment on the first stock = Rs.26000
Number of stocks purchases = 26000/104 = 250
His total income from all these stocks = Rs.250 × 5 = Rs.1250
He sells each of this stock at Rs.120
ie, amount he earns = Rs.120 × 250 = Rs.30000
He invest this Rs.30000 in 6% stock (here also face value is not given and hence take it as Rs.100)
His new income = Rs.(1250 + 2500) = Rs.3750
ie, By Rs.30000 of investment , he earns an income of Rs.3750
To get an income of Rs.6, investment needed = (30000 × 6)/3750 = Rs.48
Since it is a 5% stock, we can take the dividend per stock = Rs.5
Market Value of the first stock = Rs.104
Investment on the first stock = Rs.26000
Number of stocks purchases = 26000/104 = 250
His total income from all these stocks = Rs.250 × 5 = Rs.1250
He sells each of this stock at Rs.120
ie, amount he earns = Rs.120 × 250 = Rs.30000
He invest this Rs.30000 in 6% stock (here also face value is not given and hence take it as Rs.100)
His new income = Rs.(1250 + 2500) = Rs.3750
ie, By Rs.30000 of investment , he earns an income of Rs.3750
To get an income of Rs.6, investment needed = (30000 × 6)/3750 = Rs.48
Most Upvoted Answer
A man invested Rs. 26000 in 5% stock at 104. He sold the stock when th...
Let's break down the given information and solve the problem step by step.
Given:
1. The man invested Rs. 26000 in a 5% stock at 104.
2. He sold the stock when the price rose to Rs. 120.
3. He invested the sale proceeds in a 6% stock.
4. His income increased by Rs. 2500.
Let's calculate the income from the first investment:
Income from the first investment = (Investment * Rate of Interest) / 100
= (26000 * 5) / 100
= Rs. 1300
Let's calculate the sale proceeds from the first investment:
Sale proceeds = Investment + Income from the first investment
= 26000 + 1300
= Rs. 27300
Now, let's calculate the income from the second investment:
Income from the second investment = (Sale proceeds * Rate of Interest) / 100
= (27300 * 6) / 100
= Rs. 1638
According to the given information, the income increased by Rs. 2500. Therefore, we can write the equation as:
New income - Old income = Rs. 2500
Income from the second investment - Income from the first investment = Rs. 2500
Substituting the values, we get:
1638 - 1300 = Rs. 2500
Simplifying further, we find that the difference between the two incomes is Rs. 338.
Now, let's find the difference in the investment amount between the two stocks:
Difference in investment = Sale proceeds - Investment
= 27300 - 26000
= Rs. 1300
We know that the difference in income is Rs. 338, and this is due to the difference in investment of Rs. 1300. Therefore, we can calculate the rate of interest for the second stock as:
Rate of Interest = (Difference in income / Difference in investment) * 100
= (338 / 1300) * 100
≈ 26%
Now, let's find the purchase price of the second stock:
Purchase price of the second stock = (Sale proceeds * 100) / (100 + Rate of Interest)
= (27300 * 100) / (100 + 26)
≈ Rs. 48000 / 126
≈ Rs. 380.95
Since the purchase price is in fractional form, it is not one of the given options. However, we can round it off to the nearest whole number, which is Rs. 380. Therefore, the correct option is None of these.
Therefore, option B (Rs. 48) is not the correct answer.
Given:
1. The man invested Rs. 26000 in a 5% stock at 104.
2. He sold the stock when the price rose to Rs. 120.
3. He invested the sale proceeds in a 6% stock.
4. His income increased by Rs. 2500.
Let's calculate the income from the first investment:
Income from the first investment = (Investment * Rate of Interest) / 100
= (26000 * 5) / 100
= Rs. 1300
Let's calculate the sale proceeds from the first investment:
Sale proceeds = Investment + Income from the first investment
= 26000 + 1300
= Rs. 27300
Now, let's calculate the income from the second investment:
Income from the second investment = (Sale proceeds * Rate of Interest) / 100
= (27300 * 6) / 100
= Rs. 1638
According to the given information, the income increased by Rs. 2500. Therefore, we can write the equation as:
New income - Old income = Rs. 2500
Income from the second investment - Income from the first investment = Rs. 2500
Substituting the values, we get:
1638 - 1300 = Rs. 2500
Simplifying further, we find that the difference between the two incomes is Rs. 338.
Now, let's find the difference in the investment amount between the two stocks:
Difference in investment = Sale proceeds - Investment
= 27300 - 26000
= Rs. 1300
We know that the difference in income is Rs. 338, and this is due to the difference in investment of Rs. 1300. Therefore, we can calculate the rate of interest for the second stock as:
Rate of Interest = (Difference in income / Difference in investment) * 100
= (338 / 1300) * 100
≈ 26%
Now, let's find the purchase price of the second stock:
Purchase price of the second stock = (Sale proceeds * 100) / (100 + Rate of Interest)
= (27300 * 100) / (100 + 26)
≈ Rs. 48000 / 126
≈ Rs. 380.95
Since the purchase price is in fractional form, it is not one of the given options. However, we can round it off to the nearest whole number, which is Rs. 380. Therefore, the correct option is None of these.
Therefore, option B (Rs. 48) is not the correct answer.
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A man invested Rs. 26000 in 5% stock at 104. He sold the stock when the price rose to Rs. 120 and invested the sale proceeds in 6% stock. By doing this his income increased by Rs. 2500. At what price did he purchase the second stock?a)Rs. 125b)Rs. 48c)Rs. 24d)None of theseCorrect answer is option 'B'. Can you explain this answer?
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A man invested Rs. 26000 in 5% stock at 104. He sold the stock when the price rose to Rs. 120 and invested the sale proceeds in 6% stock. By doing this his income increased by Rs. 2500. At what price did he purchase the second stock?a)Rs. 125b)Rs. 48c)Rs. 24d)None of theseCorrect answer is option 'B'. Can you explain this answer? for LR 2024 is part of LR preparation. The Question and answers have been prepared according to the LR exam syllabus. Information about A man invested Rs. 26000 in 5% stock at 104. He sold the stock when the price rose to Rs. 120 and invested the sale proceeds in 6% stock. By doing this his income increased by Rs. 2500. At what price did he purchase the second stock?a)Rs. 125b)Rs. 48c)Rs. 24d)None of theseCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for LR 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A man invested Rs. 26000 in 5% stock at 104. He sold the stock when the price rose to Rs. 120 and invested the sale proceeds in 6% stock. By doing this his income increased by Rs. 2500. At what price did he purchase the second stock?a)Rs. 125b)Rs. 48c)Rs. 24d)None of theseCorrect answer is option 'B'. Can you explain this answer?.
A man invested Rs. 26000 in 5% stock at 104. He sold the stock when the price rose to Rs. 120 and invested the sale proceeds in 6% stock. By doing this his income increased by Rs. 2500. At what price did he purchase the second stock?a)Rs. 125b)Rs. 48c)Rs. 24d)None of theseCorrect answer is option 'B'. Can you explain this answer? for LR 2024 is part of LR preparation. The Question and answers have been prepared according to the LR exam syllabus. Information about A man invested Rs. 26000 in 5% stock at 104. He sold the stock when the price rose to Rs. 120 and invested the sale proceeds in 6% stock. By doing this his income increased by Rs. 2500. At what price did he purchase the second stock?a)Rs. 125b)Rs. 48c)Rs. 24d)None of theseCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for LR 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A man invested Rs. 26000 in 5% stock at 104. He sold the stock when the price rose to Rs. 120 and invested the sale proceeds in 6% stock. By doing this his income increased by Rs. 2500. At what price did he purchase the second stock?a)Rs. 125b)Rs. 48c)Rs. 24d)None of theseCorrect answer is option 'B'. Can you explain this answer?.
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