Salman invests a sumof money in Rs 50 shares, paying 15% dividend quoted at 20% premium. If his annual dividend is Rs 600, calculate :
(ii) his total investment.

Answer

To solve the problem step by step, let's break it down:

### Step 1: Understand the given information
- Nominal value of shares = Rs 50
- Dividend rate = 15%
- Premium = 20%
- Annual dividend received by Salman = Rs 600

### Step 2: Calculate the Market Value of the Shares
The market value of a share is calculated as follows:
\[ \text{Market Value} = \text{Nominal Value} + \text{Premium} \]
Given that the premium is 20% of the nominal value:
\[ \text{Premium} = 20\% \text{ of } 50 = \frac{20}{100} \times 50 = 10 \]
Thus, the market value of the share is:
\[ \text{Market Value} = 50 + 10 = 60 \]

### Step 3: Relate the Annual Dividend to the Number of Shares
The annual dividend received by Salman can be expressed in terms of the number of shares (n) and the dividend per share:
\[ \text{Annual Dividend} = n \times \text{Dividend per Share} \]
The dividend per share is calculated as:
\[ \text{Dividend per Share} = \text{Nominal Value} \times \frac{\text{Dividend Rate}}{100} = 50 \times \frac{15}{100} = 7.5 \]
Now, substituting the values into the annual dividend equation:
\[ 600 = n \times 7.5 \]

### Step 4: Solve for the Number of Shares (n)
To find n, rearrange the equation:
\[ n = \frac{600}{7.5} = 80 \]

### Step 5: Calculate the Total Investment
The total investment can be calculated by multiplying the number of shares by the market value:
\[ \text{Total Investment} = n \times \text{Market Value} = 80 \times 60 = 4800 \]

### Final Answer
Thus, Salman's total investment is Rs 4800.

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