Question

A main invest Rs. 4500 in shares of a company which is paying 7.5% dividend.  If Rs. 100 shares are available at a discount of 10%.
Find :
(i) Number of shares he purchaces.
(ii) His annual income.

Answer 1

Rs. 100 shares at a discount of 10%
                        will cost = 100 – 10
                                     = Rs. 90

(i) ∴ Number of shares = `4500/90` = 50 shares

(ii) His annual income at 7.5% dividend

`"Annual income" = ("Number Of Share" xx "Divident Percent" xx FV)/100`

                           =`(50 xx 7.5 xx 100)/100`

                           = 50 × 7.5

Annual income = Rs 375.0