1.

Sastry invests half his salary in 4% stock at 95and the other half in 8% stock at 105. Sharmainvests the same amounts . in 4% stock at90 and 8% stock at 110. Who receives a betterpercentage yield?​

Answer»

GIVEN: Sastry invests half his salary in 4% stock at 95  and the other half in 8% stock at 105. Sharma  invests the same amounts . in 4% stock at  90 and 8% stock at 110.

To find: Who receives a better  percentage yield?​

Solution:

               2 x 95 x 105 x 90 x 110

  • Now sastry makes :

               (4 x 105 x 90 x 110 ) + (8 x 95 x 90 x 110)

               90 x 110 x 4 (105 + 190)

  • So the rate of RETURN will be:

               (295 x 90 x 110 x 4 / 2 x 95 x 105 x 90 x 110 ) x 100

               5 x 9/100

  • Now sharma makes:

               (4 x 105 x 95 x 110 ) + (8 x 105 x 95 x 90)

               (110 + 180) x 4 x 105 x 95

  • So the rate of return will be:

               ( 290 x 4 x 105 x 95 / 2 x 110 x 90 x 95 x 10 ) x 100

               5 x 8 / 100

Answer:

           So sastry receives a better  percentage yield.


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