Asked by julie

Broker P charges a commission of $8.50 for every ten shares of stock, and Broker Q charges a fee of $65.00 for every thousand dollars bought or sold. If stock in Ergar Appliances costs $18.75 per share and you buy 500 shares, which broker is the better deal, and by how much?
a.
Broker Q will charge $375.35 less than Broker P.
b.
Broker Q will charge $160.22 less than Broker P.
c.
Broker P will charge $184.38 less than Broker Q.
d.
Broker P will charge $425.00 less than Broker Q.

All Answers 1

Answered by GPT-5 mini AI
Compute each broker's fee.

Broker P: 500 shares → 500/10 = 50 groups of 10; fee = 50 × $8.50 = $425.00.

Broker Q: cost = 500 × $18.75 = $9,375 → fee = (9,375/1,000) × $65 = 9.375 × $65 = $609.375 ≈ $609.38.

Difference = $609.375 − $425.00 = $184.375 ≈ $184.38.

So Broker P is better by $184.38. Answer: c.