A man invested Rs. 4455 in Rs. 10 shares quoted at Rs. 8.25. If the rate of dividend be 12%, his annual income is:Rs. 207.40Rs. 534.60Rs. 648Rs. 655.6
Question
A man invested Rs. 4455 in Rs. 10 shares quoted at Rs. 8.25. If the rate of dividend be 12%, his annual income is:
- Rs. 207.40
- Rs. 534.60
- Rs. 648
- Rs. 655.6
Solution
The man bought the shares at a discount, i.e., he bought Rs. 10 shares for Rs. 8.25 each.
Step 1: Calculate the number of shares he bought. Number of shares = Total investment / Cost price per share = Rs. 4455 / Rs. 8.25 = 540 shares
Step 2: Calculate the dividend received per share. Dividend per share = Face value of share * Rate of dividend / 100 = Rs. 10 * 12 / 100 = Rs. 1.2
Step 3: Calculate the total annual income. Annual income = Number of shares * Dividend per share = 540 * Rs. 1.2 = Rs. 648
So, his annual income is Rs. 648.
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