Q.How much should a person invest in 8% shares of face value ₹100, available at a market price of ₹160, in order to obtain an annual income of ₹2,400?

First find how many shares give the required income from the dividend per share, then find the investment from the market price of that many shares.

Each share earns ₹8, so 300 shares give the ₹2,400 income, and buying 300 shares at ₹160 fixes the money required.

Given: face value $FV = ₹100$, dividend rate $r = 8\%$, market price $MP = ₹160$, target annual income $= ₹2{,}400$.

Step 1 — Dividend per share (on face value):

Step 2 — Number of shares needed for the target income:

Step 3 — Investment required (at the market price):

Cross-check via yield. The yield here is $\dfrac{r\times FV}{MP} = \dfrac{8\times100}{160} = 5\%$. To earn ₹2,400 at a 5% yield, the investment must be $\dfrac{\text{Income}}{\text{Yield}} = \dfrac{2400}{0.05} = ₹48{,}000$ — the same figure, confirming the answer.

A common error is dividing the target income by the market price (2400/160) instead of by the dividend per share (2400/8). The income depends on the dividend per share; the market price only converts the required number of shares into rupees invested.