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Question
Mr Lal wants to give a monthly scholarship of Rs 225 to a poor student. How many 15%, Rs 100 shares of 'Mercantile Co-operative Bank' should he purchase to realize his aim? What will be his investment if the market price of the share is Rs 120?
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Solution
Let x be the no. of shares purchased by Mr Lal.
Value of x shares = Rs ( 100 x X) = Rs 100x
Dividend for x no. of shares of Mercantile Co-operative Bank = 15 % of Rs 100x
= Rs `(15 xx 100 x)/100` = Rs 15 x
Monthly scholarship = Rs 225 = Dividend/12
⇒ Rs `(15 x)/12` = Rs 225
⇒ Rs 15 x = Rs 2700
⇒ x = 180
Hence, Mr Lal should purchase 180 shares.
The market price for shares = Rs 120,
Investment by Mr Lal at Rs 120 = Rs ( 120 x 180) = Rs 21,600.
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