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To produce an annual income of Rs. 1200 from a 12% stock at 90, the amount of stock needed is__________?

Correct answer: A. Rs. 10,000

  • A. Rs. 10,000
  • B. Rs. 10,800
  • C. Rs. 14,400
  • D. Rs. 16,000Education

Explanation

To receive Rs. 1200 from a 12% stock, the nominal stock value must be Rs. 1200 ÷ 0.12 = Rs. 10000. The quotation of Rs. 90 means the actual purchase cost would be Rs. 9000, but the amount of stock required is Rs. 10000. The likely trap is option b, Rs. 10800, which does not produce exactly Rs. 1200 at a 12% dividend.

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Percentages express a quantity as parts per hundred and support calculations involving increases, decreases, discounts, commissions, taxes, and successive changes. Questions require distinguishing percentage change from percentage points and identifying the original value when a final value and its percentage change are given.

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