Find the cost price of a Rs 100 stock at 4 discount when brokerage is 1/4 percent.

Given data

• Quoted at 4 discount ⇒ market price = Rs 96 per Rs 100 face
• Brokerage = 0.25 percent on the market price

Concept / Approach

• Total cost price = Market price + Brokerage.
• Brokerage is computed as a percentage of the amount paid to the market.

Step-by-step calculation

Market price = Rs 96Brokerage = 0.25 percent of 96 = 96 × 0.0025 = 0.24Total cost = 96 + 0.24 = Rs 96.24

Verification

Brokerage added after discount reflects the actual purchase cost per Rs 100 face.

Common pitfalls

• Applying brokerage to face value instead of market price.
• Interpreting 4 discount as 4 percent off an arbitrary base rather than Rs 4 below par for this context.

Final Answer

Rs 96.24