Question

Rohit purchased 300 shares of face value Rs. 10 at Rs. 5 premium. He had to pay \[0.5\% \] brokerage. How much total did he spend?

Answer 1

Hint: First we will find the market value is calculated by finding the sum of face value and the premium. Then we will multiply the above market value with the 300 shares to find the total amount of purchase and then add both obtained values to find the total amount Rohit spent.

Complete step by step Answer:

We are given that Rohit purchased 300 shares of face value Rs. 10 at Rs. 5 premium.
We know that market value is calculated by finding the sum of face value and the premium, we get
\[
   \Rightarrow {\text{Market Value}} = 10 + 5 \\
   \Rightarrow {\text{Market Value}} = 15 \\
 \]
So, multiplying the above market value with the 300 shares to find the total amount of purchase, we get
\[
   \Rightarrow {\text{Total Amount}} = 15 \times 300 \\
   \Rightarrow {\text{Total Amount}} = 4500{\text{ ......(1)}} \\
 \]
Now finding the brokerage of the transaction by multiplying the above total amount by the rate of brokerage Rohit paid, we get
\[
   \Rightarrow {\text{Brokerage}} = 4500 \times 0.5\% \\
   \Rightarrow {\text{Brokerage}} = 4500 \times \dfrac{{0.5}}{{100}} \\
   \Rightarrow {\text{Brokerage}} = 4500 \times \dfrac{5}{{1000}} \\
   \Rightarrow {\text{Brokerage}} = 45 \times \dfrac{1}{2} \\
   \Rightarrow {\text{Brokerage}} = 22.5{\text{ ......(2)}} \\
 \]
Adding (1) with (2) to find the total amount he spent, we get
\[
   \Rightarrow 4500 + 22.5 \\
   \Rightarrow 4522.5 \\
 \]

Thus, we have that the total amount of Rohit spent is Rs. \[4522.5\].

Note: In solving these types of questions, you need to know that a brokerage is a fee, which is a fee charged to arrange a contract between two parties. One should also know that market value is calculated by face value and the premium. The market value of the shares is decided by the investment market.