A man bought 20 shares of Rs. 50 at 5 discount the rate of dividend being 4 3/ 4% The rate of interest obtained is?

43/4%
31/4%
5.28%
4.95%

Correct Answer: 5.28%

Explanation:

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%

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