Question

The market value of a mutual fund is Rs. 15 crore. The company has divided into 60 lakh units. Find the NAV of each unit. If Sarala invests Rs. 12000 in the fund, how many units will she get?

Answer 1

Hint: In order to find the NAV of each unit we will just divide the market value of the company by the total no of units divided. Then after finding the NAV of one unit we can find out no of units of Sarala by dividing her investment by NAV of one unit.

Complete Step-by-Step solution:
Given that:
Total market share = Rs. 15 crore.
No of units of shares = 60 lakh
First let us find the NAV of each unit.
To find the NAV of each unit we will divide the total market value by number of shares.
So, the NAV of each unit is:
$
   = \dfrac{{Rs.15,00,00,000}}{{60,00,000}} \\
   = \dfrac{{Rs.150}}{6} \\
   = Rs.25 \\
 $
Now as we know the NAV of each unit is Rs. 25.
Now let us find the number of units bought by Sarala.
As Sarala invests Rs. 12000.
To find the number of units bought we will divide the total Investment by NAV of each unit.
So, number of shares for Sarala
$
   = \dfrac{{Rs.12000}}{{Rs.25}} \\
   = \dfrac{{12000}}{{25}} \\
   = 480 \\
 $
Hence, Sarala will get 480 units.

Note: In order to solve such types of problems we should start with finding the cost of one unit of any item that is given in the problem. Thereafter it is easier to find the cost of any number of items. The second part of the problem can also be solved by the use of ratio and proportion. But the method used here is the basic one.