A man invests ₹10080 in 6% hundred-rupee shares at ₹112. Find his annual income. When the shares fall to ₹96 he sells out the shares and invests the proceeds in 10% ten-rupee shares at ₹8. Find the change in his annual income.

Total Investment = ₹10080

Market Value per share = ₹112

∴ No. of shares

$= \dfrac{\text{Total Investment}}{\text{MV per share}} \\[0.7em] = \dfrac{10080}{112} \\[0.5em] = \bold{90}$

Rate of Dividend = 6%

Nominal value per share = ₹100

Annual Dividend = No. of shares x Rate of Dividend x Nominal Value per share

$= 90 \times \dfrac{6}{100} \times 100 \\[0.5em] = \bold{₹540}$

∴ Annual Income = ₹540

Let's calculate the Annual Income of his new investment.

Selling price of 1 share = ₹96
∴ Selling price of 90 shares = ₹(90 x 96) = ₹8640

Hence, sale proceeds = ₹8640

Total Investment in new shares = ₹8640

Market Value per share of new shares = ₹8

∴ No. of new shares

$= \dfrac{\text{Total Investment}}{\text{MV per share}} \\[0.7em] = \dfrac{8640}{8} \\[0.5em] = \bold{1080}$

Nominal value per share of new shares = ₹10

Rate of Dividend of new shares = 10%

Annual Dividend from new shares = No. of shares x Rate of Dividend x Nominal Value per share

$= 1080 \times \dfrac{10}{100} \times 10 \\[0.5em] = \bold{₹1080}$

∴ Change in Annual Income = ₹1080 - ₹540 = ₹540

Annual Income increased by ₹540