**Chapter 4 Financial Planning Set 4B**

## Chapter 4 Financial Planning Set 4B

Question 1.

Write the correct alternative for the following questions.

**i. If the Face Value of a share is â‚¹ 100 and Market value is â‚¹ 75, then which of the following statement is correct?(A) The share is at premium of â‚¹ 175(B) The share is at discount of â‚¹ 25(C) The share is at premium of â‚¹ 25(D) The share is at discount of â‚¹ 75Answer:**
(B)

**ii. What is the amount of dividend received per share of face value â‚¹ 10 if dividend declared is 50%.(A) â‚¹ 50(B) â‚¹ 5(C) â‚¹ 500(D) â‚¹ 100Answer:**

Dividend = 10 Ã— 50/100 = â‚¹ 5

(B)

**iii. The NAV of a unit in mutual fund scheme is â‚¹ 10.65, then find the amount required to buy 500 such units.(A) 5325(B) 5235(C) 532500(D) 53250Answer:**
(A)

**iv. Rate of GST on brokerage is _______(A) 5%(B) 12%(C) 18%(D) 28%Answer:**
(C)

**v. To find the cost of one share at the time of buying the amount of Brokerage and GST is to be ______ MV of share.(A) added to(B) subtracted from(C) Multiplied with(D) divided byAnswer:**

(A)

**Question 2. Find the purchase price of a share of FV â‚¹ 100 if it is at premium of â‚¹ 30. The brokerage rate is 0.3%.Solution:**
Here, Face Value of share = â‚¹ 100,

premium = â‚¹ 30, brokerage = 0.3%

MV = FV + Premium

= 100 + 30

= â‚¹ 130

Brokerage = 0.3% of MV

= 0.3/100 Ã— 130 = â‚¹ 0.39

Purchase price of a share = MV + Brokerage

= 130 + 0.39

= â‚¹ 130.39

Purchase price of a share is â‚¹ 130.39.

**Question 3.Prashant bought 50 shares of FV â‚¹ 100, having MV â‚¹ 180. Company gave 40% dividend on the shares. Find the rate of return on investment.Solution:**

Here, Number of shares = 50, FV = â‚¹ 100,

MV = â‚¹ 180, rate of dividend = 40%

âˆ´ Sum invested = Number of shares Ã— MV

= 50 Ã— 180

= â‚¹ 9000

Dividend per share = 40% of FV

= 40/100 Ã— 100

Dividend = â‚¹ 40

âˆ´ Total dividend on 50 shares = 50 Ã— 40

= â‚¹ 2000

âˆ´ Rate of return on investment is 22.2%.

**Question 4.Find the amount received when 300 shares of FV â‚¹ 100, were sold at a discount of â‚¹ 30.Solution:**

Here, FV = â‚¹ 100, number of shares = 300,

discount = â‚¹ 30

MV of 1 share = FV â€“ Discount

= 100 â€“ 30 = â‚¹ 70

âˆ´ MV of 300 shares = 300 Ã— 70

= â‚¹ 21,000

âˆ´ Amount received is â‚¹ 21,000.

**Question 5.Find the number of shares received when â‚¹ 60,000 was invested in the shares of FV â‚¹ 100 and MV â‚¹ 120.Solution:**

Here, FV = â‚¹ 100, MV = â‚¹ 120,

Sum invested = â‚¹ 60,000

âˆ´ Number of shares received were 500.

**Question 6.Smt. Mita Agrawal invested â‚¹ 10,200 when MV of the share is â‚¹ 100. She sold 60 shares when the MV was â‚¹ 125 and sold remaining shares when the MV was â‚¹ 90. She paid 0.1% brokerage for each trading. Find whether she made profit or loss? and how much?Solution:**

For purchasing shares:

Here, sum invested = â‚¹ 10,200, MV = â‚¹ 100

For selling shares:

60 shares sold at MV of â‚¹ 125.

âˆ´ MV of 60 shares = 125 Ã— 60

= â‚¹ 7500

Brokerage = 0.1/100 Ã— 7500 = â‚¹ 7.5

âˆ´ Sale value of 60 shares = 7500 â€“ 7.5 = â‚¹ 7492.5

Now, remaining shares = 102 â€“ 60 = 42

But 42 shares sold at MV of â‚¹ 90.

âˆ´ MV of 42 shares = 42 Ã— 90 = â‚¹ 3780

âˆ´ Brokerage = 0.1/100 Ã— 3780 = â‚¹ 3.78

âˆ´ Sale value of 42 shares = 3780 â€“ 3.78 = â‚¹ 3776.22

Total sale value = 7492.5 + 3776.22 = â‚¹ 11268.72

Since, Purchase value < Sale value

âˆ´ Profit is gained.

âˆ´ Profit = Sale value â€“ Purchase value

= 11268.72 â€“ 10210.2

= â‚¹ 1058.52

âˆ´ Smt. Mita Agrawal gained a profit of â‚¹ 1058.52.

**Question 7. Market value of shares and dividend declared by the two companies is given below.Face value is same and it is 7 100 for both the shares. Investment in which company is more profitable?i. Company A â€“ â‚¹ 132,12%ii Company B â€“ â‚¹ 144,16%Solution:**

For company A:

FV = â‚¹ 100, MV = â‚¹ 132,

Rate of dividend = 12%

Dividend = 12% of FV

âˆ´ Rate of return of company B is more.

âˆ´ Investment in company B is more profitable.

**Question 8. Shri. Aditya Sanghavi invested â‚¹ 50,118 in shares of FV â‚¹ 100, when the market value is â‚¹ 50. Rate of brokerage is 0.2% and Rate of GST on brokerage is 18%, then How many shares were purchased for â‚¹ 50,118?Solution:**

Here, FV = â‚¹ 100, MV = â‚¹ 50

Purchase value of shares = â‚¹ 50118,

Rate of brokerage = 0.2%, Rate of GST = 18%

Brokerage = 0.2% of MV

âˆ´ 1000 shares were purchased for â‚¹ 50,118.

**Question 9. Shri. Batliwala sold shares of â‚¹ 30,350 and purchased shares of â‚¹ 69,650 in a day. He paid brokerage at the rate of 0.1% on sale and purchase. 18% GST was charged on brokerage. Find his total expenditure on brokerage and tax.Solution:**

Total amount = sale value + Purchase value

= 30350 + 69650

= â‚¹ 1,00,000

Rate of Brokerage = 0.1 %

Brokerage = 0.1 % of 1,00,000

= 0.1/100 Ã— 1,00,000

= â‚¹ 100

Rate of GST = 18%

âˆ´ GST = 18 % of brokerage

= 18/100 Ã— 100

âˆ´ GST = â‚¹ 18

Total expenditure on brokerage and tax

= 100 + 18 = â‚¹ 118

âˆ´ Total expenditure on brokerage and tax is â‚¹ 118.

Alternate Method:

Brokerage = 0.1 %, GST = 18%

At the time of selling shares:

Total sale amount of shares = â‚¹ 30,350

Brokerage = 0.1% of 30,350

For purchasing shares:

Total purchase amount of shares = â‚¹ 69,650

Brokerage = 0.1% of 69,650

= 0.1/100 Ã— 69650

= â‚¹ 69.65

GST = 18% of 69.65

= 18/100 Ã— 69.65

= â‚¹ 12.537

âˆ´ Total expenditure on brokerage and tax = Brokerage and tax on selling + Brokerage and tax on purchasing

= (30.35 + 5.463) + (69.65 + 12.537)

= â‚¹ 118

âˆ´ Total expenditure on brokerage and tax is â‚¹ 118.

**Question 10. Sint. Aruna Thakkar purchased 100 shares of FV 100 when the MV is â‚¹ 1200. She paid brokerage at the rate of 0.3% and 18% GST on brokerage. Find the following â€“i. Net amount paid for 100 shares.ii. Brokerage paid on sum invested.iii. GST paid on brokerage.iv. Total amount paid for 100 shares.Solution:**

Here, FV = â‚¹ 100,

Number of shares = 100, MV = â‚¹ 1200

Brokerage = 0.3%, GST = 18%

i. Sum invested = Number of shares Ã— MV

= 100 Ã— 1200 = â‚¹ 1,20,000

âˆ´ Net amount paid for 100 shares is â‚¹ 1,20,000.

ii. Brokerage = 0.3% of sum invested

= 0.3/100 Ã— 1,20,000 = â‚¹ 360

âˆ´ Brokerage paid on sum invested is â‚¹ 360.

iii. GST = 18% of brokerage

= 18/100 Ã— 360 = â‚¹ 64.80

âˆ´ GST paid on brokerage is â‚¹ 64.80.

iv. Total amount paid for 100 shares

= Sum invested + Brokerage + GST

= 1,20,000 + 360 + 64.80

= â‚¹ 1,20,424.80

âˆ´ Total amount paid for 100 shares is â‚¹ 1,20,424.80.

**Question 11. Smt. Anagha Doshi purchased 22 shares of FV â‚¹ 100 for Market Value of â‚¹ 660. Find the sum invested. After taking 20% dividend, she sold all the shares when market value was â‚¹ 650. She paid 0.1% brokerage for each trading done. Find the percent of profit or loss in the share trading. (Write your answer to the nearest integer)Solution:**

For purchasing shares:

Here, FV = â‚¹ 100, MV = â‚¹ 660, Number of shares = 22, rate of brokerage = 0.1%

Sum invested = MV Ã— Number of shares

= 660 Ã— 22

= â‚¹ 14,520

Brokerage = 0.1 % of sum invested

= 0.1/100 Ã— 14520 = â‚¹ 14.52

âˆ´ Amount invested for 22 shares

= Sum invested + Brokerage

= 14520 + 14.52

= â‚¹ 14534.52

For dividend:

Rate of dividend = 20%

âˆ´ Dividend per share = 20 % of FV

âˆ´ Percentage of profit in the share trading is 1 % (nearest integer).

Alternate Method:

For purchasing share:

Here, FV = â‚¹ 100, MV = â‚¹ 660, Number of shares = 22, rate of brokerage = 0.1%

Sum invested = MV Ã— Number of shares

= 660 Ã— 22

= â‚¹ 14,520

Brokerage = 0.1 % of MV

= 0.1/100 Ã— 660 = â‚¹ 0.66

Amount invested for 1 share = 660 + 0.66

= â‚¹ 660.66

For dividend:

Rate of dividend = 20%

Dividend = 20% of FV = 20/100 Ã— 100 = â‚¹ 20

For selling share:

MV = â‚¹ 650, rate of brokerage = 0.1%

Brokerage = 0.1 % of MV

= 0.1/100 Ã— 650 = â‚¹ 0.65 100

Amount received after selling 1 share

= 650 â€“ 0.65 = 649.35

âˆ´ Amount received including divided

= selling price of 1 share + dividend per share

= 649.35 + 20

= â‚¹ 669.35

Since, income > Amount invested

âˆ´ Profit is gained.

âˆ´ profit = 669.35 â€“ 660.66 = â‚¹ 8.69

Profit Percentage = 8.69/660.60 Ã— 100= 1.31%

âˆ´ Percentage of profit in the share trading is 1 % (nearest integer).