Question

Rachel bought 1,500 shares of Cawh Consolidated Bank at a price of $24.85 each. As the price climbed, she sold off parts of her holdings. She sold off 250 shares at $28.32 apiece, she sold 800 of her shares at $33.60 apiece, and she sold off the remainder of her shares at $39.94 apiece. If Rachel’s broker charges a commission of $65 per $1,000 of stock bought or sold, how much profit did Rachel make, to the nearest dollar?
a.
$20,459
b.
$51,933
c.
$14,661
d.
$8,859

Answer 1

Compute purchase and sale totals including commissions.

Purchase:
- Cost = 1,500 × $24.85 = $37,275.00
- Commission on buy = $65 per $1,000 → 37.275 × $65 = $2,422.875
- Total purchase outlay = $37,275.00 + $2,422.875 = $39,697.875

Sales:
- 250 @ $28.32 = $7,080.00; commission = 7.08 × $65 = $460.20 → net = $6,619.80
- 800 @ $33.60 = $26,880.00; commission = 26.88 × $65 = $1,747.20 → net = $25,132.80
- 450 @ $39.94 = $17,973.00; commission = 17.973 × $65 = $1,168.245 → net = $16,804.755

Total net proceeds from sales = $6,619.80 + $25,132.80 + $16,804.755 = $48,557.355

Profit = total proceeds − total outlay = $48,557.355 − $39,697.875 = $8,859.48

Rounded to the nearest dollar: $8,859. Answer: d.