Question:

Amol purchased 50 shares of Face Value Rs. 100 when the Market value of the share was Rs. 80. Company had given 20% dividend. Find the rate of return on investment.

Answer:

Given FV = Rs. 100; MV = Rs. 80; D = 20%
On investment of Rs. 80, Amol got Rs. 20.
Let rate of return be x%.
20/80 = x/ 100
¼ = x/100
x = 100/4
⇒ x = 25% (Rate of Return)

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Amol purchased 50 shares of Face Value Rs. 100 when the Market value of the share was Rs. 80. Company had given 20% dividend. Find the rate of return on investment.

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