Mrs Gupta invested Rs 16500 on Rs 100 shares at a premium of 10 paying 10% dividend. At the end of the year, she sells the shares at a premium of ₹20. Find her rate of return.

$22\frac{8}{11}$%

The correct answer is option (1) : $22\frac{8}{11}$%

M.V. of 1 share of $₹100 = ₹(100+10) = ₹110$

Given cost of investment $=₹16500$

∴ No. of shares bought $=\frac{₹16500}{₹110}=₹150$

Dividend on 1 share of ₹100= 15% of $₹100 = ₹15$

Dividend on 150 shares of $₹ 100 = ₹(15×150)= ₹2250$

Given that Mrs. Gupta sold the shares at premium of ₹ 20  i.e. at $₹(100+ 20) = ₹120$

So profit on 1 share $=₹ 120 - ₹110 = ₹10$

Profit on 150 shares $=₹(10×150) = ₹1500$

∴ Total return $=₹2250 + ₹1500=₹3750$

So, rate of return $=\frac{3750}{16500}×100$%

$= 22\frac{8}{11}$%