A person, while trading the shares of a particular company, observes that its price has gone down by 10% from the previous day. In anticipation of increment on the next day, he holds it for the next day. But the share price further falls down by another 8% of the previous day. Then he sells his shares and gets ₹12,420. How much could he have saved had he sold it the previous day?

Given:

Share price decreased by 10% on the first day.

Share price further decreased by 8% on the second day.

Final amount received after selling the shares = ₹12,420.

Formula Used:

Initial Price = Final Price / (1 - Decrease Percentage)

Calculation:

Let the initial price of the shares be ₹P.

After the first day, the price decreased by 10%:

Price after first day = P × (1 - 0.10) = 0.90P

After the second day, the price decreased by 8%:

Price after second day = 0.90P × (1 - 0.08) = 0.90P × 0.92 = 0.828P

Given that the final price after the second day is ₹12,420:

0.828P = 12,420

⇒ P = 12,420 / 0.828

⇒ P = 15,000

Initial Price = ₹15,000

If the person had sold the shares after the first day, the price would have been:

Price after first day = 0.90 × 15,000 = ₹13,500

Amount saved if sold after the first day:

Saving = 13,500 - 12,420

⇒ Saving = ₹1,080

The person could have saved ₹1,080.