What income will be derived by investing rs 1900 in 8 percent stock at 5 discount?

Options

A. Rs 160
B. Rs 150
C. Rs 100
D. Rs 180

Answer

To solve the problem of determining the income derived from investing Rs 1900 in an 8% stock at a 5% discount, we can follow these steps:

### Step-by-Step Solution:

1. **Determine the Market Value of the Stock:**
The nominal value of the stock is Rs 100. Since there is a 5% discount, the market value of the stock can be calculated as:
\[ \text{Market Value} = 100 - 5 = 95 \]

2. **Calculate the Number of Stocks Purchased:**
To find out how many stocks can be purchased with Rs 1900 at the market value of Rs 95, we use the formula:
\[ \text{Number of Stocks} = \frac{\text{Investment}}{\text{Market Value}} = \frac{1900}{95} \]
Performing the division:
\[ \text{Number of Stocks} = 20 \]

3. **Calculate the Annual Income from the Investment:**
The income from the investment can be calculated using the formula:
\[ \text{Income} = \text{Number of Stocks} \times \text{Dividend Rate} \]
The dividend rate is 8% of the nominal value (Rs 100):
\[ \text{Income} = 20 \times \left(\frac{8}{100} \times 100\right) = 20 \times 8 = 160 \]

4. **Final Result:**
Therefore, the income derived from investing Rs 1900 in the 8% stock at a 5% discount is Rs 160.

### Summary of the Solution:
- Market Value of stock = Rs 95
- Number of stocks purchased = 20
- Annual Income = Rs 160