Question

Aman invests Rs.29929 in shares of par value Rs.26 at $10\%$ premium. The dividend is 15% per annum. Calculate:

(i) the number of shares

(ii) the dividend received by him annually

(iii) the rate of interest he gets on his money.

• A. i) 700, ii) Rs.2730, iii) 13(7/11) %
• B. i) 800, ii) Rs.2730, iii) 13(9/11) %
• C. i) 800, ii) Rs.2030, iii) 13(7/11) %
• D. i) 700, ii) Rs.2030, iii) 12%

Answer 1

The correct option is A

i) 700, ii) Rs.2730, iii) 13(7/11) %

(i) Here, Par value = Rs.26, Premium = $10\%$, Let the no. of shares be x

Market value of one share = Rs.26 + $10\%$ of Rs.26 = Rs.26 (1 + 10/100)

= Rs.26 $\times$ (11/10) = Rs.143/5.

As per question, (143/5) x = 20020 or, x = (20020 $\times$ 5)/143 = 700

(ii) Dividend per share = $15\%$ of Rs.26 = (15/100) $\times$ Rs.26 = Rs.3.90

Hence, dividend on 700 shares = Rs.3.90 $\times$ 700 = Rs.2730.

(iii) On Rs.20020 his income is Rs.2730

On Rs.100 his income is (Rs.2730/Rs.20020) $\times$ 100 = 150/11 = 13(7/11)

Hence, his income = 13(7/11) $\%$