A wants to secure an annual income of Tk. 1500 by investing in 15% debentures of face value Tk. 100 each and available for Tk. 104 each. If the brokerage is 1%, then the sum of money he should invest is -

Question: A wants to secure an annual income of Tk. 1500 by investing in 15% debentures of face value Tk. 100 each and available for Tk. 104 each. If the brokerage is 1%, then the sum of money he should invest is -

Solution:
Income on each debenture = 15% of Tk. 100 = Tk. 15
Number of debentures required = 1500/15 = Tk. 100
Cost of each debenture =Tk. (104 + 1% of 104)
= (104 + 1.04)
= Tk. 105.04

∴ Total investment = Tk. (105.04 × 100)
= Tk. 10504