How much should a man invest in ₹ 25 shares selling at ₹ 36 to obtain annual income of ₹ 1,500, if dividend declared is 12% ?

Given,

Face Value = ₹ 25

Market Value = ₹ 36

Dividend Rate = 12%

Required annual income = ₹ 1,500

Let no. of shares sold be ₹ x.

By formula,

Annual income = No. of shares × Rate of div. × N.V. of 1 share

$\Rightarrow 1500 = x \times \dfrac{12}{100} \times 25 \\[1em] \Rightarrow x = \dfrac{1500 \times 100}{25 \times 12} \\[1em] \Rightarrow x = 500.$

By formula,

Investment = No. of shares × Market value of each share

= 500 × 36

= ₹ 18,000.

Hence, the man should invest ₹ 18,000.