Aman invests -20020 in shares of par value -26 at 10- premium- The dividend is 15i the number of sharesii the dividend received by him annuallyiii the rate of interest he gets on his money-

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Aman invests ...

Question

Aman invests ₹20020 in shares of par value ₹26 at $10 %$ premium. The dividend is 15% per annum. Calculate:
(i) the number of shares
(ii) the dividend received by him annually
(iii) the rate of interest he gets on his money.

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Solution

(i) Here, N.V of the share = ₹26, Premium = $10 %$ , Let the no. of shares be x

Market value of one share = ₹26 + $10 %$ of ₹26 = ₹26 (1 + $\frac{10}{100}$ )

= ₹26 $\times$ $\frac{11}{10}$ = ₹ $\frac{143}{5}$

Number of shares = $\frac{Total Investment}{Market Value of one share}$

x = $\frac{20020 \times 5}{143} = 700$ [1 Mark]

(ii) Dividend per share = $15 %$ of ₹26 = $\frac{15}{100}$ $\times$ ₹26 = ₹3.90

Hence, dividend on 700 shares = ₹3.90 $\times$ 700 = ₹2730. [1 Mark]

(iii) Let the rate of interest be x%

We know, Rate of interest x M.V = Dividend % x N.V

$x$ $\times$ $\frac{143}{5}$ = 15 % $\times$ 26

$\frac{x}{100}$ = $\frac{15}{100}$ $\times$ 26 $\times$ $\frac{5}{143}$

Rate of interest = $\frac{150}{11}$ % [1 Mark]

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Aman invests ₹20020 in shares of par value ₹26 at 10% premium. The dividend is 15% per annum. Calculate: (i) the number of shares (ii) the dividend received by him annually (iii) the rate of interest he gets on his money.

Aman invests ₹20020 in shares of par value ₹26 at $10 %$ premium. The dividend is 15% per annum. Calculate:
(i) the number of shares
(ii) the dividend received by him annually
(iii) the rate of interest he gets on his money.