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On 1st April 2001 Insurance Co. purchase 10% securities of Rs. 10,000 at 98% Cum Interest. Interest will get on 1st January and 1st July every year. Find out Investment purchase price and Interest.?
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On 1st April 2001 Insurance Co. purchase 10% securities of Rs. 10,000 ...
Investment Purchase Price:
Interest Calculation:
Therefore, the investment purchase price is Rs. 5,050.50 and the interest for the period from 1st April 2001 to 30th June 2001 is Rs. 124.50.
- 10% securities of Rs. 10,000 at 98% Cum Interest.
- 98% Cum Interest means that the interest is included in the purchase price.
- Therefore, the investment purchase price can be calculated as:
- Rs. 10,000 / (1 + 0.98) = Rs. 5,050.50
Interest Calculation:
- Interest will get on 1st January and 1st July every year.
- The investment was purchased on 1st April 2001.
- Therefore, the first interest payment will be received on 1st July 2001.
- Interest will be calculated for the period from 1st April 2001 to 30th June 2001.
- Interest rate is not given, but it can be calculated as follows:
- Face value of securities = Rs. 10,000
- Cum Interest price of securities = Rs. 5,050.50
- Therefore, the interest component is Rs. (10,000 - 5,050.50) = Rs. 4,949.50
- Interest rate = (Interest component / Cum Interest price) x (365 / number of days)
- Interest rate = (4,949.50 / 5,050.50) x (365 / 91)
- Interest rate = 0.0975 or 9.75%
- Interest for the period from 1st April 2001 to 30th June 2001 can be calculated as:
- Interest = (Investment purchase price x Interest rate x number of days) / 365
- Interest = (5,050.50 x 0.0975 x 91) / 365
- Interest = Rs. 124.50
Therefore, the investment purchase price is Rs. 5,050.50 and the interest for the period from 1st April 2001 to 30th June 2001 is Rs. 124.50.
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On 1st April 2001 Insurance Co. purchase 10% securities of Rs. 10,000 at 98% Cum Interest. Interest will get on 1st January and 1st July every year. Find out Investment purchase price and Interest.?
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On 1st April 2001 Insurance Co. purchase 10% securities of Rs. 10,000 at 98% Cum Interest. Interest will get on 1st January and 1st July every year. Find out Investment purchase price and Interest.? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about On 1st April 2001 Insurance Co. purchase 10% securities of Rs. 10,000 at 98% Cum Interest. Interest will get on 1st January and 1st July every year. Find out Investment purchase price and Interest.? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On 1st April 2001 Insurance Co. purchase 10% securities of Rs. 10,000 at 98% Cum Interest. Interest will get on 1st January and 1st July every year. Find out Investment purchase price and Interest.?.
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