Question

A man bought 20 shares of Rs. 50 at 5 discount, the rate of dividend being \(13\frac{1}{2}\% \). The rate of interest obtained is
1. \(13\frac{1}{2}\% \)
2. \(12\frac{1}{2}\%\)
3. 15%
4. \(16\frac{2}{3}\% \)

Answer 1

Correct Answer - Option 3 : 15%

Investment = 20 × (50 – 5) = 900

Face value = (50 × 20) = 1000

Dividend = (27/2) × (1000/100) = 135 

Interest obtained = (135/900) × 100 = 15%