If x sells for Rs.20 each, 250 Rs.10 share in a company which pays a dividend of 10% and then invests the proceeds of this sale in the purchase of Rs.5 shares in another company at Rs.4 each, find what difference is made in his income if the company pays a dividend of 4%?

  1. 50

  2. 66

  3. 105

  4. None of these.


Correct Option: D

AI Explanation

To solve this problem, let's break it down into steps:

Step 1: Calculate the initial income from selling the shares at Rs.20 each. The initial investment is 250 shares at Rs.10 each, so the total investment is 250 * 10 = Rs.2500. When these shares are sold at Rs.20 each, the total income is 250 * 20 = Rs.5000.

Step 2: Calculate the income after receiving a dividend of 10%. The dividend received is 10% of the initial income, which is 10% of Rs.5000 = Rs.500. The total income after receiving the dividend is Rs.5000 + Rs.500 = Rs.5500.

Step 3: Calculate the income after investing the dividend in another company. The dividend of Rs.500 is used to buy shares in another company at Rs.4 each. So, the number of shares bought is Rs.500 / Rs.4 = 125 shares.

Step 4: Calculate the income from the new investment. The new investment is 125 shares at Rs.5 each, so the total investment is 125 * 5 = Rs.625. The income from selling these shares at Rs.20 each is 125 * 20 = Rs.2500.

Step 5: Calculate the income after receiving a dividend of 4% on the new investment. The dividend received is 4% of the income from the new investment, which is 4% of Rs.2500 = Rs.100. The total income after receiving the dividend is Rs.2500 + Rs.100 = Rs.2600.

Step 6: Calculate the difference in income. The initial income was Rs.5500, and the income after the new investment is Rs.2600. The difference in income is Rs.5500 - Rs.2600 = Rs.2900.

Therefore, the difference in income is Rs.2900.

Since the correct answer is not among the given options (A, B, C, or D), it seems that there might be an error in the options provided. Please double-check the options or consult the original source for the correct answer.

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