Question

A man wants to buy 62 shares available at Rs 132 (par value of Rs 100)
(i) How much should he invest?
(ii) If the dividend is $7.5\%$, what will be his annual income?
(iii) If he wants to increase his annual income by Rs 150, how many extra shares should he buy?
[4 MARKS]

Answer 1

part (i): 1 Mark
part (ii): 1 Mark
part (iii): 2 Marks

(i) Investment = Rs 132 $\times$ 62 = Rs 8184
(ii) Total face value of 62 shares = Rs 100 $\times$ 62 = Rs 6200
= $7.5\%$ of Rs 6200
$=\frac{75}{1000}\times 6200=465$
(iii) For an income of Rs 465, No. of shares = 62
For an income of Rs 1, No. of shares = $\frac{62}{465}$
For an income of Rs 150, No. of shares = $\frac{62}{465}\times 150$
= 20