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.

Answer 1

Dear student
$$\begin{gathered} \mathrm{i})\mathrm{Here}\mathrm{per}\mathrm{value}=\mathrm{Rs}26 \\ \mathrm{Premium}=10\% \\ \mathrm{Let}\mathrm{the}\mathrm{number}\mathrm{of}\mathrm{shares}\mathrm{be}\mathrm{x} \\ \mathrm{Market}\mathrm{value}\mathrm{of}\mathrm{one}\mathrm{share}=\mathrm{Rs}26+10\%\mathrm{of}\mathrm{Rs}26=\mathrm{Rs}\frac{143}{5} \\ \mathrm{A}.\mathrm{T}.\mathrm{Q} \\ \left(\frac{143}{5}\right)\mathrm{x}=29929 \\ \Rightarrow \mathrm{x}=\frac{29929\times 5}{143}=1046 \\ \mathrm{ii})\mathrm{Dividend}\mathrm{per}\mathrm{share}=15\%\mathrm{of}\mathrm{Rs}26=\frac{15}{100}\times 26=\mathrm{Rs}3.90 \\ \mathrm{Hence}\mathrm{dividend}\mathrm{on}1046\mathrm{shares}=1046\times 3.90=\mathrm{Rs}4079 \\ \mathrm{iii})\mathrm{On}\mathrm{Rs}29929\mathrm{his}\mathrm{income}\mathrm{is}\mathrm{Rs}4079 \\ \mathrm{On}\mathrm{Rs}100\mathrm{his}\mathrm{income}\mathrm{is}=\frac{4079}{29929}\times 100 \\ \mathrm{Hence}\mathrm{his}\mathrm{income}\mathrm{is}\mathrm{Rs}13.6\% \end{gathered}$$
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