Question

Bashir Khan purchased 100 shares of MV Rs 40. Brokerage paid at the rate of 0.5% and rate of GST on brokerage is 18%. Find the total amount he paid for the share purchase.
(a) Rs 4020
(b) Rs 4233.20
(c) Rs 4023.60
(d) Rs 4003

Answer 1

Hint: We will calculate the brokerage for the shares using the given rate. We will calculate the brokerage in amount for 100 shares. Then we will find the amount of GST on brokerage on the 100 shares using the given percentage. We have to find the total amount he paid for the share purchase. For that we will add the price of 100 shares, the brokerage for the 100 shares and the GST on brokerage.

Complete step-by-step answer:
Bashir Khan purchased 100 shares of MV Rs 40. So, the amount to be paid for 100 shares will be,
$\text{price for 100 shares = 100 }\times \text{ 40 = 4000 Rs}\text{.}$
The brokerage is paid at the rate of 0.5%. The amount for brokerage is calculated as follows,
$\begin{align}
  & \text{Brokerage amount = }\dfrac{0.5}{100}\times 4000 \\
 & \Rightarrow \text{Brokerage amount = 0}\text{.5}\times 40 \\
 & \therefore \text{Brokerage amount = 20 Rs} \\
\end{align}$
Now, we have to calculate the GST on brokerage. We know that the rate of GST on brokerage is 18%. So, we will calculate the amount of GST on brokerage in the following manner,
$\begin{align}
  & \text{GST on brokerage = }\dfrac{18}{100}\times 20 \\
 & \Rightarrow \text{GST on brokerage = 0}\text{.18}\times 20 \\
 & \therefore \text{GST on brokerage = 3}\text{.6 Rs} \\
\end{align}$
We have to find the total amount he paid for the share purchase. We will calculate the total amount by adding the price of 100 shares, the brokerage for the 100 shares and the GST on brokerage. So, we will get the following
$\begin{align}
  & \text{Total amount = 4000 + 20 + 3}\text{.6} \\
 & \therefore \text{Total amount}=4023.6\text{ Rs} \\
\end{align}$
Hence, the correct option is (c).

So, the correct answer is “Option (c)”.

Note: The GST is to be calculated on the brokerage. There is a possibility that we might misunderstand the question and calculate the GST on the price of shares and obtain the incorrect answer. It is important to do the calculations explicitly so that we can avoid making any minor mistakes.