Commercial Mathematics - Shares and Dividends

A person invests ₹ $9000$ in shares of a company which is paying $8 \%$ dividend. If ₹ $100$ shares are available at a discount of $10 \%$, find the number of shares purchased and the annual income.


Money invested $= $ ₹ $9000$

Face value (FV) of each share $= $ ₹ $100$

Market value (MV) of each share $= $ ₹ $100 - 10 \%$ of ₹ $100$

$ = $ ₹ $\left(100 - \dfrac{10}{100} \times 100\right) = $ ₹ $90$

$\therefore \;$ Number of shares bought $= \dfrac{\text{money invested}}{\text{MV of each share}} = \dfrac{9000}{90} = 100$

Dividend (income) on one share $= 8 \%$ of FV $= \dfrac{8}{100} \times $ ₹ $100 = $ ₹ $8$

$\therefore \;$ Total income from the shares $= 100 \times $ ₹ $8 = $ ₹ $800$