A person invested rs.8000 in rs.100 shares at a discount of 20%, paying a dividend of 15%. (i) How many shares did he buy? (ii) What was his annual income (iii) Find return percent on investment.
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given : investment Rs 8000, FV of share Rs 100,
discount 20% , dividend Rs 15%
to find (1) number of shares bought
(2) his annual income
(3) % return on his investment
MV = FV - discount = 100 - 20×100/100
=> MV = Rs 80
number of shares bought =
investment / MV of share
=> 8000/80 = 100 shares Answer (1)
Annual income = number of shares × dividend
[as dividend is declared on FV, 15% of 100 = Rs 15]
therefore annual income = 100 × 15
=> Rs 1500 Answer (2)
% returns on his investment of rs 8000 is,
=> [total dividend × 100] ÷ investment
=> [1500 × 100] / 8000
=> 150/8
=> 18.75% Answer (3)
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