Question

Calculate the percentage income in the following investment:

Rs 7,225 paying 12% when a Rs 100 share is available at 15% discount.

Answer 1

Investment= Rs 7,225 

Nominal value of each share =Rs 100 

Market value = Rs( 100 - 15 % of Rs 100) = Rs ( 100-15) = Rs 85 

No. of shares purchased = `7225/85 = 85`

Face value of 85 shares =Rs 100 x 85 =Rs 8,500 

Dividend = 12 % 

Therefore, Annual Income = `(12 xx 8500)/100` = Rs 1020

Hence, percentage income

= `(1020 xx 100)/7225 = 140117 % = 14.12 %`