Sakshi invests part of Rs 12,000 in 12 percent stock at Rs 120 and the rest in 15 percent stock at Rs 125. If the total annual dividend is Rs 1,360, how much is invested in the 12 percent stock at Rs 120?

Given data

• Total capital = Rs 12,000
• 12 percent at Rs 120 ⇒ yield on investment = 12/120 = 10 percent
• 15 percent at Rs 125 ⇒ yield on investment = 15/125 = 12 percent
• Total dividend = Rs 1,360

Concept / Approach

• Let x be the rupees invested at 12 percent at Rs 120. Remaining is 12,000 − x invested at 15 percent at Rs 125.
• Dividend additivity: 0.10 x + 0.12 (12,000 − x) = 1,360.

Step-by-step calculation

0.10x + 0.12(12,000 − x) = 1,3600.10x + 1,440 − 0.12x = 1,360−0.02x = −80 ⇒ x = Rs 4,000

Verification

Dividend from Rs 4,000 at 10 percent = 400; from Rs 8,000 at 12 percent = 960; total = 1,360.

Common pitfalls

• Using coupon rates directly on the face value portion rather than the market-based yields on invested rupees.

Final Answer

Rs 4,000