Question

Mr. Tiwari invested Rs 29,040 in $15\%$ Rs 100 shares quoted at a premium of $20\%$. Calculate
(i) the number of shares bought by Mr. Tiwari.
(ii) Mr. Tiwari's income from the investment.
(iii) the percentage return on his investment.
[4 MARKS]

Answer 1

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

Investment = Rs 29040, Face value of each share = Rs 100
Market value of each share = Rs 100 + $20\%$ of Rs 100
= Rs 120
(i) No. of shares bought by Mr. Tiwari = $\frac{29040}{120}=242$
(ii) Total face value of 242 shares = Rs 100 $\times$ 242
= Rs 24200
Dividend = $15\%$ of Rs 24200
$=\frac{15}{100}\times 24200$
= Rs 3630
$\therefore$ Mr. Tiwari's income = Rs 3630
(iii) Percentage return = $\frac{3630}{29040}\times 100\%$
$=12.5\%$