Question

At what price should a 9% Rs. 100 share be quoted when the money is worth 4%.

Answer 1

Hint: We first find the total amount from the price of 9 for the amount of 100. We also use the income percentage from total income and return percentage. We use the formula of the return and investment as $r=\dfrac{i}{x}\times 100$ to find the solution.

Complete step-by-step solution:
The relation between the investment and the return is stated as $r=\dfrac{i}{x}\times 100$ where the terms $r,i,x$ define the return percentage, income and investment respectively.
For our given problem the income is at 9. We assume the investment as $x$. The return percentage is when the money is worth 4%.
Therefore, we put $r=4,i=9$. We get $4=\dfrac{9}{x}\times 100$.
Simplifying we get
$\begin{align}
  & 4=\dfrac{9}{x}\times 100 \\
 & \Rightarrow x=\dfrac{9}{4}\times 100=225 \\
\end{align}$
Therefore, at Rs. 225 a 9% Rs. 100 shares are quoted when the money is worth 4%.

Note: Return and yield are different aspects of measuring the profit of an investment. Yield can be termed as the investment return over time, whereas the return is the amount that was gained for an investment over time. We can’t confuse the return percentage of investment and income upon investment.