# The face value of a share is Rs.100. Aakash purchased 25 shares when its market value was Rs. 70. In the year, the company declared 20% divided. Find the rate of return Aakash got on his investment.

Last updated date: 23rd Mar 2023

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Answer

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Hint: Use the formula, \[Rate{\text{ }}of{\text{ }}return = \dfrac{{{\text{Total dividend}}}}{{{\text{Sum invested}}}} \times 100\].

Complete step-by-step answer:

It has been given that,

Face value of a share=Rs. 100

Market value of a share=Rs. 750

So, Total amount invested=25×70=Rs. 1750

Dividend=20%

Therefore total dividend on 25 shares=20×25=Rs. 1500

Now,

$ Rate{\text{ }}of{\text{ }}return = \dfrac{{{\text{Total dividend}}}}{{{\text{Sum invested}}}} \times 100 \\

= \dfrac{{500}}{{1750}} \times 100 \\

= 28.57\% \\

$

Therefore Aakash gets 28.57% return on his investment.

Note: One must be able to recognise which is face value and which one is market value.

Face value= Nominal price

Market value= price at which shares are bought.

Complete step-by-step answer:

It has been given that,

Face value of a share=Rs. 100

Market value of a share=Rs. 750

So, Total amount invested=25×70=Rs. 1750

Dividend=20%

Therefore total dividend on 25 shares=20×25=Rs. 1500

Now,

$ Rate{\text{ }}of{\text{ }}return = \dfrac{{{\text{Total dividend}}}}{{{\text{Sum invested}}}} \times 100 \\

= \dfrac{{500}}{{1750}} \times 100 \\

= 28.57\% \\

$

Therefore Aakash gets 28.57% return on his investment.

Note: One must be able to recognise which is face value and which one is market value.

Face value= Nominal price

Market value= price at which shares are bought.

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