Question

Value of 12% stock yielding 10% is quoted at
A. Rs. 83.33
B. Rs. 110
C. Rs. 112
D. Rs. 120

Answer 1

Hint: In this problem we had to find the value of stock. So, to solve this we will use the percentage formula A% of B is \[\dfrac{A}{{100}} \times B\] find the money needed to be invested to earn profit of Rs. 12.

Complete step-by-step answer:
Let the amount needed to earn is Rs. 10.
Then money that has to be invested will be equal to Rs. x.
As we know that the stock is quoted at 10%.
So, Rs. 10 will be the 10% of x.
So, now using percentage formula which states that A% of B is written as \[\dfrac{A}{{100}} \times B\]
So, 10% of x is equal to Rs. 10
So, \[\dfrac{{10}}{{100}} \times x = 10\]
Multiplying both sides of the above equation by 10. We get,
x = Rs. 100
So, the amount needed to earn Rs. 10 is Rs. 100.
Now we had to find the value of 12% stocks yielding 10%.
So, let the amount that needs to be invested to earn Rs. 12 be y, if the yielding is 12% .
So, 10% of y is equal to Rs. 12.
Now again applying the percentage formula.
So, \[\dfrac{{10}}{{100}} \times y = 12\]
Multiplying both sides of the above equation by 10. We get,
y = Rs. 120
So, the amount needed to be invested to earn Rs. 12 will be equal to Rs. 120.
As we are asked with the value of 12% stocks if yield is 10%.
So, the value of Rs. 100 stocks will be equal to Rs. 120.
Hence, the correct option will be D.

Note: Whenever we come up with this type of problem then we have to find the value relative to Rs. 100 stocks because it will be easy to relate this as this is a multiple of 10. First, we had to find the amount needed to invest to earn Rs. 10 (because yield is 10%) and then we found the amount needed to invest to earn Rs. 12 because we had to find the value of 12% stocks. And the value of Rs. 100 stocks will be equal to the amount invested to earn Rs. 12. This will be the easiest and efficient way to find the solution of the problem.