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Mathematics

A man invests ₹ 20,020 in buying shares of N.V. ₹ 26 at 10% premium. The dividend on the shares is 15% per annum. Calculate :

(i) the number of shares he buys.

(ii) the dividend he receives annually.

(iii) the rate of interest he gets on his money.

Shares & Dividends

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Answer

(i) M.V. = ₹ 26 + 10100×26\dfrac{10}{100} \times 26 = ₹ 26 + ₹ 2.6 = ₹ 28.6

Investment = ₹ 20,020

No. of shares bought = 2002028.6\dfrac{20020}{28.6} = 700.

Hence, no. of shares bought = 700.

(ii) Annual dividend = No. of shares × Rate of div. × N.V. of 1 share

= 700 × 15100×26\dfrac{15}{100} \times 26

= ₹ 2,730.

Hence, dividend = ₹ 2,730.

(iii) Rate of interest = 273020020×100=27300020020=13711\dfrac{2730}{20020} \times 100 = \dfrac{273000}{20020} = 13\dfrac{7}{11}%.

Hence, the rate of interest = 1371113\dfrac{7}{11}%.

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