Question

A man wants to buy 124 shares available at Rs 66 (N.V. = Rs 50).
If the dividend is 7.5%, what will be his annual income?

Answer 1

Hint: In order to find the man’s annual income, we consider all the data given in the question and apply the formula of annual income to determine the answer.
Income = Number of shares × rate of dividend × Nominal value
Given value should be taken as the market value.
N.V stands for nominal value.

Complete step-by-step answer:
Given Data,
Number of shares = 124
Nominal value = Rupees 50
Market value = Rupees 66
Dividend = 7.5 %

We know the annual income is given by the formula,
Income = Number of shares × rate of dividend × Nominal value
Given, Number of shares = 124, Nominal value = Rupees 50 and Dividend = 7.5 %
⟹Income = 124 × $\dfrac{{7.5}}{{100}}$ × 50
⟹Income = 465 rupees.

Therefore the annual income of the man is Rs 465.

Note: In order to solve this type of problems the key is to know the formula of the annual income of the man, with the given variables as number of shares, NV, MV and the dividend.
It is an important step to take the dividend as a fraction divided by hundred as it is expressed in percentage which essentially means the value is expressed per hundred.