Masood invests a part of Rs. 12000 in 12% stock at Rs. 120 and the remainder in 15% stock at Rs. 125. If his total dividend per annum is Rs. 1360, how much does he invest in 12% stock at Rs. 120?
Correct answer: D. Rs 4000Education
- A. Rs. 4500
- B. Rs. 6000
- C. Rs. 5500
- D. Rs 4000Education
Explanation
If x is invested in the 12% stock at Rs. 120, its income is x x 12/120 = 0.10x. The remaining Rs. 12000 - x earns (12000 - x) x 15/125 = 0.12(12000 - x), so 0.10x + 0.12(12000 - x) = Rs. 1360, giving x = Rs. 4000. The likely mistake is option b, Rs. 6000, which overlooks that the second investment earns the higher effective return.
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