Question

Charlie buys 500, ₹20 shares at a discount of 20% and receives a return of 10% on his investment. Find the following: The amount invested by Charlie = ₹ The rate of dividend paid by the company = %

Answer 1

Step-by-step explanation:

( i ) The Amount invested is Rs 8,000

( i i ) The rate dividend paid by company is 8%

( i i i ) The Amount dividend is Rs 800  

Step-by-step explanation:

Given as :

The cost of share = Rs 500

Total number of shares = 20

The return percentage =  10%

According to question

Let The Amount invested = Rs A

The rate divided paid = r %

( i )

m.v.= number of share - (discount % × number of share )

Or, m.v = 20 - (   × 20 )

i.e m . v = 20 - 4 = 16

So, Amount invested = no. of shares × m.v.

i.e  A = 500 × 16 = 8000

∴   Amount = Rs 8000

Again From formula

( ii )

m.v. × return percent = n.v. × dividend percent

i.e 16 ×   = 20 ×

Or, 16 × 10 = 20 × r

∴   r =

i.e rate = 8%

Now,

( iii ) Annual dividend = share cost × number of share × rate %

i.e  Annual dividend = 500 × 20 ×

∴  Annual dividend = Rs 800

Hence, ( i ) The Amount invested is Rs 8,000

          ( i i ) The rate dividend paid by company is 8%

          ( i i i ) The Amount dividend is Rs 800  . Answer

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