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On 1st April 2001 Insurance Co. purchases 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. purchases 10% securities of Rs. 10,000...
On 1st April 2001 Insurance Co. purchases 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. purchases 10% securities of Rs. 10,000...
Investment Purchase Price Calculation:
The purchase price of the securities can be calculated using the following formula:
Purchase Price = Face Value x Market Price x (1 - Cumulative Interest)
Where,
Face Value = Rs. 10,000
Market Price = 98% of Face Value = Rs. 9,800
Cumulative Interest = 10% x (6/12) = 5%
Substituting the values in the formula, we get:
Purchase Price = Rs. 10,000 x Rs. 9,800 x (1 - 5%) = Rs. 9,310
Therefore, the purchase price of the securities is Rs. 9,310.
Interest Calculation:
The interest on the securities will be calculated on a semi-annual basis, i.e., on 1st January and 1st July every year. The interest rate is 10% per annum.
The interest for the period from 1st April 2001 to 31st December 2001 will be calculated as follows:
Interest = Face Value x Interest Rate x Time
Time = 9/12 (9 months from 1st April to 31st December)
Substituting the values, we get:
Interest = Rs. 10,000 x 10% x (9/12) = Rs. 750
Therefore, the interest for the period from 1st April 2001 to 31st December 2001 is Rs. 750.
Similarly, interest will be calculated on a semi-annual basis for the subsequent periods.
Conclusion:
The investment purchase price of the securities is Rs. 9,310 and the interest for the period from 1st April 2001 to 31st December 2001 is Rs. 750. The interest will be paid on 1st January and 1st July every year.
The purchase price of the securities can be calculated using the following formula:
Purchase Price = Face Value x Market Price x (1 - Cumulative Interest)
Where,
Face Value = Rs. 10,000
Market Price = 98% of Face Value = Rs. 9,800
Cumulative Interest = 10% x (6/12) = 5%
Substituting the values in the formula, we get:
Purchase Price = Rs. 10,000 x Rs. 9,800 x (1 - 5%) = Rs. 9,310
Therefore, the purchase price of the securities is Rs. 9,310.
Interest Calculation:
The interest on the securities will be calculated on a semi-annual basis, i.e., on 1st January and 1st July every year. The interest rate is 10% per annum.
The interest for the period from 1st April 2001 to 31st December 2001 will be calculated as follows:
Interest = Face Value x Interest Rate x Time
Time = 9/12 (9 months from 1st April to 31st December)
Substituting the values, we get:
Interest = Rs. 10,000 x 10% x (9/12) = Rs. 750
Therefore, the interest for the period from 1st April 2001 to 31st December 2001 is Rs. 750.
Similarly, interest will be calculated on a semi-annual basis for the subsequent periods.
Conclusion:
The investment purchase price of the securities is Rs. 9,310 and the interest for the period from 1st April 2001 to 31st December 2001 is Rs. 750. The interest will be paid on 1st January and 1st July every year.
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On 1st April 2001 Insurance Co. purchases 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. purchases 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. purchases 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. purchases 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?.
On 1st April 2001 Insurance Co. purchases 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. purchases 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. purchases 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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