(a) A man invests Rs. 20,020 in buying shares having a nominal value o

1.	(a) A man invests Rs. 20,020 in buying shares having a nominal value of Rs.26 at 10%premium. The dividend on the shares is 15% per annum. Calculate:i. The number of shares he buys.i. The dividend he receives annually[31iii. The rate of interest he gets on his money
Answer» Total Investment = 20020FV of 1 share = 26MV of 1 share = 26(1 + 10/100) = 26(11/10) = 28.60Dividend on one share = (15/100)26 = 3.90 (1) Number of shares bought = 20020/28.60 = 700 (2) Annual Dividend = 7003.90 = Rs 2730 (3) Rate of Interest = (2730/20020)*100 = 13.6 %

(a) A man invests Rs. 20,020 in buying shares having a nominal value of Rs.26 at 10%premium. The dividend on the shares is 15% per annum. Calculate:i. The number of shares he buys.i. The dividend he receives annually[31iii. The rate of interest he gets on his money

Answer»

Total Investment = 20020FV of 1 share = 26MV of 1 share = 26(1 + 10/100) = 26(11/10) = 28.60Dividend on one share = (15/100)*26 = 3.90

(1) Number of shares bought = 20020/28.60 = 700

(2) Annual Dividend = 700*3.90 = Rs 2730

(3) Rate of Interest = (2730/20020)*100 = 13.6 %