When we invest in shares, it is important to know the return on investment. Observe the following example.
Ex. (1) Shriyash purchased a share of FV Rs. 100 for MV of Rs.120. Company declared 15% dividend on the share. Find the rate of return.
Solution : FV = Rs. 100, MV = Rs.120 D = Dividend = 15% per share.
Remember here, that on investment of Rs.120 Shriyash got Rs. 15.
Let the rate of return be x %
ans: The rate of return for Shriyash is 12.5%.