Question

Rani has $500$ shares of $Rs125$ each of a company paying $12\%$ dividend. Find her net income after paying $5\%$ income tax.

Answer 1

Given that,

Number of shares $=500$

Nominal value of each share $=Rs125$

So, face value of $500$ shares $=Rs125\times 500$

$=Rs62,500$

Rate of dividend $=12\%$

Therefore, total dividend $=\frac{62,500\times 12}{100}$

$=Rs7,500$

So, rate of income tax $=5\%$

Total tax $=\frac{5\times 7500}{100}=Rs375$

Hence, net income $=Rs(7,500-375)=Rs7,125$