What sum should a person invest in ₹25 shares, selling at ₹36, obtain an income of ₹720, if the dividend declared is 12%? Also find the percentage return on his income.

Let the number of shares purchased be x.

Nominal Value per share = ₹25

Market Value per share = ₹36

Rate of Dividend = 12%

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

According to the given,

$720 = x \times \dfrac{12}{100} \times 25 \\[0.5em] 720 = 3x \\[0.5em] x = \dfrac{720}{3} \\[0.5em] x = 240$

∴ Total Investment Required = No. of shares x Market Value per share
= 240 x 36
= ₹8640

$\% \text{Return} = \Big(\dfrac{\text{Annual Inc.}}{\text{Investment}} \times 100\Big)\% \\[0.5em] = \Big(\dfrac{720}{8640} \times 100\Big) \% \\[0.5em] = \Big(\dfrac{72000}{8640} \Big) \% \\[0.5em] = \Big(\dfrac{25}{3} \Big) \% \\[0.5em] = \bold{8\frac{1}{3}\%}$