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Class 12 Applied Maths Chapter 13 Solutions
Return, Growth And Depreciation
EXERCISE- 13.1
Q.1 A person invests R.10000 in 10% 100 shares of a company available at a premium of 25. Find his rate of return.
Ans. Total Investment = Rs.10000
Face Value = Rs.100
Dividend = 10%
Market Value = 100 + 25 = Rs.125
Number of shares = 10000/125
= 80
Dividend = 100 x 10/100 x 80
= Rs.800
Rate of Return = 800/10000 x 100
= 8%
Q.2 A man invests Rs.22500 in 50 shares available at 10% discount. If the dividend paid by the company is 12%, calculate his rate of return.
Ans. Total Investment = Rs.22500
Face Value = Rs.50
Dividend = 12%
Market Value = 50 – 10% of 50
= 50 – 10/100 x 50
= Rs.45
Number of shares = 22500/45
= 500
Dividend = 50 x 12/100 x 500
= Rs.3000
Rate of Return = 3000/22500 x 100
= 40/3
= 13 1/3%
Q.3 A person invested Rs.200000 in a fund for one year. At the end of the year, the investment was worth Rs.216000. Calculate his rate of return.
Ans. Gain = 216000 – 200000
= Rs.16000
Rate of Return = 16000/200000 x 100
= 8%
Q.4 Mitul invested ₹3,50,000 in a fund. At the end of the year the value of the fund is ₹4,37,500. What is the nominal rate of interest, if the market price is same at the end of the year?
Ans. Gain = 437500 – 350000
= Rs.87500
Rate of Return = 87500/350000 x 100
= 25%
Q.5 Salman invests a sum of money in ₹50 shares paying 10% dividend quoted at 20% discount. If his annual dividend is ₹600, calculate his rate of return from the investment.
Ans. Let, Total investment be Rs. x
Face Value = Rs.50
Discount = 20% of 50
= 20/100 x 50
= Rs.10
Market Value = 50 – 10 = Rs.40
Dividend = 10% or 600
Number of shares = x/40
Dividend = Face value x dividend% x No. of share
600 = 50 x 10/100 x x/40
x = 4800
Rate of Return = 600/4800 x 100
= 12 1/2%
Q.6 A man invests a sum of money in Rs.100 shares paying 15% dividend quoted at 20% premium. If his annual dividend is Rs.540, calculate the rate of return on his investment.
Ans. Let, Total investment be Rs. x
Face Value = Rs.100
Discount = 15% of 100
= 15/100 x 100
= Rs.15
Market Value = 100 + 15 = Rs.115
Dividend = 15% or 540
Number of shares = x/115
Dividend = Face value x dividend% x No. of share
540 = 100 x 15/100 x x/115
x = 4140
Rate of Return = 540/4140 x 100
= 12 1/2%
Q.7 Mr. Satendra holds 1500, Rs.100 shares of a company paying 15% dividend annually quoted at 30% premium. Calculate rate of return on his investment.
Ans. Number of shares = 1500
Face Value = Rs.100
Premium = 30% of 10 = 30
Market value = 100 + 30 = Rs.130
Total Investment = 1500 x 130
= Rs.195000
Dividend = 15%
Dividend = 100 x 15/100 x 1500
= 22500
Rate of Return = 22500/195000 x 100
= 11 7/3%
Q.8 Rs.100 shares of a company are sold at a discount of Rs.20. If the return on the investment is 15%, find the rate of dividend declared.
Ans. Face value = Rs.100
Market value = Rs.80
Rate of Return = 15%
= 80 x 15/100
= Rs.12
Dividend = Rs.12
Dividend = 12/100 x 100
= 12%
Q.9 A company declared a dividend of 14%. Find the market value of Rs.50 shares, if the return on the investment was 10%.
Ans. Face value = Rs.50
Dividend = 50 x 14/100
= Rs.7
Let, market value be Rs.x
Rate of Return = 10%
x * 10/100 = 7
x = 70
So, Market value = Rs.70
Q.10 Mrs. Gupta invested Rs.16500 on Rs.100 shares at a premium of Rs.10 paying 15% dividend. At the end of the year, she sells the shares at a premium of Rs.20. Find her rate of return.
Ans. Total Investment = Rs.16500
Face value = Rs.100
Market value = Rs.110
Number of share = 16500/100
= 150
Dividend = 100 x 15/100 x 150
= 2250
Selling price of share = 100 + 20 = Rs.120
Sale value = 120 x 150 = Rs.18000
Profit = 18000 – 16500
= Rs.1500
Net Profit = 2250 + 1500
= 3750
Rate of Return = 3750/16500 x 100
= 250/11 = 22 8/11%
Q.11 Mr. Verma invested Rs.18000 on Rs.100 shares at a discount of Rs.25 paying 12% dividend. At the end of the year, he sells the shares at a discount of Rs.10. Find his rate of return.
Ans. Total Investment = Rs.18000
Face value = Rs.100
Market value = 100 – 25 = Rs.75
Number of share = 18000/75
= 240
Dividend = 100 x 12/100 x 240
= 2880
Selling price of share = 100 – 10 = Rs.90
Sale value = 90 x 240 = Rs.216000
Profit = 21600 – 18000
= Rs.3600
Net Profit = 2880 + 3600
= Rs.6480
Rate of Return = 6480/18000 x 100
= 36%
FAQ’s related to Class 12 Applied Maths Chapter 12 on Return, Growth And Depreciation:
Q.1 What is the concept of “Return” in finance?
Ans. In finance, “Return” refers to the profit or loss derived from an investment over a particular period. It is typically expressed as a percentage of the original investment amount. Returns can be in the form of interest, dividends, capital gains, or any other form of financial gain from an investment.
Q.2 What is “Depreciation,” and why is it important?
Ans. Depreciation is the process of allocating the cost of a tangible asset over its useful life. It represents the wear and tear, deterioration, or obsolescence of an asset. Depreciation is important for accounting and tax purposes as it helps businesses allocate costs and manage their financial statements by reducing the value of assets over time.
Q.3 What are the common methods of calculating depreciation?
Ans.
- Straight-Line Method: This method spreads the cost of the asset evenly over its useful life. The formula is:
Depreciation Expense = (Cost of Asset − Salvage Value)/Useful Life
- Declining Balance Method: This method applies a constant rate of depreciation to the reducing book value of the asset each year.
Q.4 How does inflation affect returns and growth?
Ans. Inflation reduces the purchasing power of money, which can affect the real returns and growth of investments. If the inflation rate is higher than the nominal return on an investment, the real return could be negative, meaning the investor’s purchasing power decreases despite earning nominal returns.
These are a few Frequently Asked Questions relating to Class 12 Applied Maths Chapter 13
In Class 12 Applied Maths chapter 13, you will explore fascinating topics that form the backbone of practical problem-solving techniques. Through clear explanations, illustrative examples, and step-by-step solutions, you’ll grasp complex concepts effortlessly. Whether you’re preparing for exams or simply eager to deepen your mathematical understanding, Class 12 Applied Maths Chapter 13 promises an enriching learning experience that will set you on the path to success. Class 12 Applied Maths Chapter 13, we delve deep into advanced mathematical concepts that are crucial for understanding.
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