A man invests ₹ 50,000 of his savings in 12%, ₹ 100 shares at ₹ 125 another ₹ 60,000 in 15%, ₹ 100 shares at ₹ 120 and remainder 18% ₹ 100 shares at ₹ 140. If his annual income is ₹ 21,300 find :

(i) the rate of return on the whole.

(ii) the investment in third company.

(i) Given,

1st Company = 12%, ₹100 shares at ₹125

Investment = ₹50,000

2nd Company = 15%, ₹100 shares at ₹120

Investment = ₹60,000

3rd Company = 18%, ₹100 shares at ₹ 140

Investment = Remaining

Total annual income = ₹ 21,300

For 1st Company :

Number of shares = $\dfrac{\text{Total investment}}{\text{Market value of each share}} = \dfrac{50000}{125} = 400$

Annual income = No. of shares × Rate of div. × N.V. of 1 share

= 400 × $\dfrac{12}{100}$ × 100

= 400 × 12

= ₹ 4,800

For 2nd company :

Number of shares = $\dfrac{\text{Total investment}}{\text{Market value of each share}} = \dfrac{60000}{120} = 500$

Annual income = No. of shares × Rate of div. × N.V. of 1 share

= 500 × $\dfrac{15}{100}$ × 100

= 500 × 15

= ₹ 7,500

Income from first two companies = ₹ 4,800 + ₹ 7,500 = ₹ 12,300

Total annual income = ₹ 21,300

Income from 3rd Company = ₹ 21,300 - ₹ 12,300 = ₹ 9,000

Annual income = No. of shares × Rate of div. × N.V. of 1 share

9000 = No. of shares × $\dfrac{18}{100}$ × 100

9000 = No. of shares × 18

No. of shares = $\dfrac{9000}{18}$ = 500

Investment in 3rd company = Number of shares × Market price = 500 × 140 = ₹ 70,000

Total Investment = ₹ 50,000 + ₹ 60,000 + ₹ 70,000 = ₹ 1,80,000

Rate of Return = $\dfrac{\text{Total income}}{\text{Total investment}} \times 100$

= $\dfrac{21300}{180000} \times 100$

= 11.83%

Hence, rate of return = 11.83%.

(ii) Investment in 3rd company = Number of shares × Market price = 500 × 140 = ₹ 70,000

Hence, investment in third company = ₹ 70,000.