A man bought 20 shares of Rs. 50 at 5 discount the rate

Home » Aptitude » Stocks and Shares » Question

A man bought 20 shares of Rs. 50 at 5 discount the rate of dividend being 4³/₄% The rate of interest obtained is ?

1. 4³/₄%
2. 3¹/₄%
3. 5.28%
4. 4.95%

Correct Option: C

Face value = Rs. (50 x 20) = Rs. 1000
Dividend = Rs. (1000 x 19) / (4 x 100) = Rs. 95/2
Investment = Rs. (45 x 20) = Rs. 900
Rate = Rs. (95 x 100) / (2 x 900) = 5.28%