Question

Ben’s broker charges a commission of $125 for every $1,000 of stock bought or sold. Ben bought 442 shares of Xyx Motors when the share price was $15.67, and sold them when the share price was $23.14. How much profit did Ben make?
a.
$10,227.88
b.
$8,083.62
c.
$1,157.48
d.
$3,301.74

Answer 1

Buy cost = 442 × $15.67 = $6,926.14
Sell proceeds = 442 × $23.14 = $10,227.88

Commission rate = $125 / $1,000 = 0.125

Buy commission = 0.125 × 6,926.14 = $865.77
Sell commission = 0.125 × 10,227.88 = $1,278.49

Profit = proceeds − (sell commission) − (cost + buy commission)
= 10,227.88 − 1,278.49 − 6,926.14 − 865.77 = $1,157.48

Answer: c. $1,157.48