Commercial Mathematics - Shares and Dividends

An investment of ₹ $8800$ is made on ₹ $100$ shares at $10\%$ premium paying $22\%$ dividend. Find the return percent on the investment and the dividend earned in one year.

Nominal value of $1$ share $= N.V =$ ₹ $100$

Market value of $1$ share $= M.V =$ ₹ $100 +$ ₹ $10 =$ ₹ $110$

Investment $=$ ₹ $8800$

$\therefore \;$ Number of shares bought $= \dfrac{\text{Investment}}{\text{M.V of 1 share}} = \dfrac{8800}{110}= 80$

Rate of dividend $= 22 \%$ (Given)

$\therefore \;$ Income (i.e. dividend) earned $=$ Number of shares $\times$ Rate of dividend $\times$ N.V

i.e. $\;$ Dividend earned $= 80 \times \dfrac{22}{100} \times 100 =$ ₹ $1760$

i.e. $\;$ ₹ $1760$ is the income obtained on investing ₹ $8800$

$\therefore \;$ Return $\%$ on investment $= \dfrac{1760}{8800} \times 100 = 20 \%$