A man invested Rs. 4455 in Rs. 10 shares quoted at Rs. 8.25. If the rate of dividend be 6%, his annual income is:
Question
A man invested Rs. 4455 in Rs. 10 shares quoted at Rs. 8.25. If the rate of dividend be 6%, his annual income is:
Solution
The man bought the shares at a discount, so first we need to find out how many shares he bought.
Step 1: Calculate the number of shares Number of shares = Total investment / Cost price per share Number of shares = 4455 / 8.25 = 540 shares
Step 2: Calculate the dividend received per share Dividend per share = Face value of share * Dividend rate / 100 Dividend per share = 10 * 6 / 100 = Rs. 0.6
Step 3: Calculate the total annual income Annual income = Number of shares * Dividend per share Annual income = 540 * 0.6 = Rs. 324
So, the man's annual income from these shares is Rs. 324.
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