An investor purchased 50 shares of stock in a company in 2015. At the time the investor purchased the stock, the value of the stock was priced at $5 per share. The investor sold all 50 shares of stock in 2019. The value of the stock at the time of sale was $6.50 per share. What is the capital gain the investor earned on this investment?(1 point)

Question

Responses

$50
50 dollars

$250
250 dollars

$325
325 dollars

$75

Answer 1

To calculate the capital gain, we can use the following formula:

\[ \text{Capital Gain} = (\text{Selling Price per Share} - \text{Purchase Price per Share}) \times \text{Number of Shares} \]

In this case:

• Selling Price per Share = $6.50
• Purchase Price per Share = $5.00
• Number of Shares = 50

Now we can calculate the capital gain:

\[ \text{Capital Gain} = (6.50 - 5.00) \times 50 \] \[ \text{Capital Gain} = 1.50 \times 50 \] \[ \text{Capital Gain} = 75 \]

Therefore, the capital gain the investor earned on this investment is $75.