Question

How much should a man invest in Rs.80 shares at Rs.75 to obtain an annual income of Rs.1080, if the dividend declared is 15 percent.

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Answer 1

Question given:

• How much should a man invest in Rs.80 shares at Rs.75 to obtain an annual income of Rs.1080, if the dividend declared is 15 percent.

Information provided with us:

• Shares are of Rs.80
• Annual income is of Rs.1080

What we have to calculate:

• We have to calculate and find out the sum of money that is invested by the man?

Using Formula:

• No. of shares bought = Total dividend / Dividend on one share
• Sum invested = No. of shares × Market value of one share

Performing Calculations:

Finding out dividend on 1 share,

➺ dividend on 1 share = 15% of 80

➺ dividend on 1 share = (15/100) × 80

➺ dividend on 1 share = (15/10) × 8

➺ dividend on 1 share = (3/2) × 8

➺ dividend on 1 share = 3 × 4

➺ dividend on 1 share = 12

• Therefore, dividend is of Rs.12

Substituting the values in the formula,

➺ No. of shares = 1080 / 12

➺ No. of shares = 540 / 6

➺ No. of shares = 270 / 3

➺ No. of shares = 90

• Therefore, no if shares is 90

Finding out amount of money man invested,

As we have no of shares is 90 and value of each share is Rs.75

Substituting the values,

➺ Invest of man = 90 × 75

➺ Invest of man = 6750

More useful formulas:

• ➺ Return % = (Income / Investment) × 100%
• ➺ Total dividend = No. of shares × Rate of dividend × Market value of one share

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