Question

zack buys 40 shares of ebay at the close price of $20.95. his broker charges him 4% of each share as a transaction fee. how much did zack spend in total to buy this stock?

A. $871.52
B. $891.46
C. $856.28
D. $838.00

Answer 1

To calculate the total amount Zack spends to buy the shares of eBay, we need to consider both the purchase price of the shares and the transaction fees.

1. **Calculate the cost of the shares:**
- Number of shares = 40
- Price per share = $20.95
- Total cost of shares = Number of shares × Price per share
\[
\text{Total cost of shares} = 40 \times 20.95 = 838
\]

2. **Calculate the transaction fee:**
- Transaction fee = 4% of the total cost of shares
\[
\text{Transaction fee} = 0.04 \times 838 = 33.52
\]

3. **Calculate the total amount spent:**
\[
\text{Total amount spent} = \text{Total cost of shares} + \text{Transaction fee}
\]
\[
\text{Total amount spent} = 838 + 33.52 = 871.52
\]

Thus, the total amount Zack spent to buy the stock is **$871.52**.

The correct answer is **A. $871.52**.