Which is the better investment `16%` `100rs` shares at `80` or `20%` `100rs` shares at `120` ?

Answer

To determine which investment is better between `16%` `100 Rs` shares at `80` or `20%` `100 Rs` shares at `120`, we will calculate the income per rupee invested for both options.

### Step 1: Calculate the income from the first investment option (16% shares at 80 Rs)

1. **Nominal Value of the Share**: 100 Rs
2. **Market Value of the Share**: 80 Rs
3. **Dividend Rate**: 16%

**Income from one share**:
- Dividend = 16% of 100 Rs = 16 Rs

**Income on the investment of 80 Rs**:
- Since the market value is 80 Rs, the income per rupee invested will be:
\[ \text{Income per rupee} = \frac{\text{Income}}{\text{Market Value}} = \frac{16}{80} = 0.20 \text{ Rs} \]

### Step 2: Calculate the income from the second investment option (20% shares at 120 Rs)

1. **Nominal Value of the Share**: 100 Rs
2. **Market Value of the Share**: 120 Rs
3. **Dividend Rate**: 20%

**Income from one share**:
- Dividend = 20% of 100 Rs = 20 Rs

**Income on the investment of 120 Rs**:
- Since the market value is 120 Rs, the income per rupee invested will be:
\[ \text{Income per rupee} = \frac{\text{Income}}{\text{Market Value}} = \frac{20}{120} \approx 0.1667 \text{ Rs} \]

### Step 3: Compare the income per rupee from both investments

- Income per rupee from the first investment (16% shares at 80 Rs): **0.20 Rs**
- Income per rupee from the second investment (20% shares at 120 Rs): **0.1667 Rs**

### Conclusion

Since **0.20 Rs** (from the first investment) is greater than **0.1667 Rs** (from the second investment), the better investment is:

**16% 100 Rs shares at 80 Rs.**

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