Mr. Tiwari invested ₹29040 in 15% ₹100 shares at a premium of 20%. Calculate:

(i) the number of shares bought by Mr. Tiwari

(ii) Mr. Tiwari's income from the investment

(iii) the percentage return on his investment.

Nominal Value per share = ₹100

Rate of Dividend = 15%

Total Investment = ₹29040

(i)
As Mr. Tiwari bought the shares at 20% premium,

Market Value of one share

$= 100 + \Big(\dfrac{20}{100} \times 100\Big) \\[0.5em] = 100 + 20 \\[0.5em] = ₹120$

Number of shares he buys

$= \dfrac{\text{Total Investment}}{\text{MV per share}} \\[0.7em] = \dfrac{29040}{120} \\[0.5em] = \bold{242}$

∴ Number of shares bought by Mr. Tiwari = 242

(ii)
Annual Dividend = No. of shares x Rate of Dividend x Nominal Value per share

$= 242 \times \dfrac{15}{100} \times 100 \\[0.5em] = \bold{₹3630}$

∴ Mr. Tiwari's income from the investment = ₹3630

(iii)
$\% \text{Return} = \Big(\dfrac{\text{Annual Inc.}}{\text{Investment}} \times 100\Big)\% \\[0.5em] = \Big(\dfrac{3630}{29040} \times 100\Big) \% \\[0.5em] = \Big(\dfrac{363000}{29040} \Big) \% \\[0.5em] = \Big(\dfrac{25}{2} \Big) \% \\[0.5em] = \bold{12.5\%}$

∴ Percentage return on his investment = 12.5%