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22 September, 00:41

An investor purchased 100 shares of stock x at / small 6/frac{1}{8} dollars per share and sold them all a year later at 24 dollars per share. if the investor paid a 2 percent brokerage fee on both the total purchase price and the total selling price, which of the following is closest to the investor's percent gain on this investment? (a) 92% (b) 240% (c) 280% (d) 300% (e) 380%

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  1. 22 September, 03:24
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    (c) 280%

    Explanation:

    Given that

    Number of shares purchased = 100 shares

    Purchase cost of a share = 49 : 8

    Sale price of a share = $24

    And, brokerage paid = 2%

    Now the purchase cost is

    = 100 shares * 49 : 8 + 2% * 100 shares * 49 : 8

    = $612.5 + 0.02 * $612.50

    = $624.75

    And, the income amount arise from the sales is

    = $24 * 100 - 2% of $2,400

    = $2,400 - $48

    = $2,352

    Now the percentage gain on the investment is

    = (Income - purchase amount invested) : (Purchase amount invested) * 100

    = ($2,352 - $624.75) : ($624.75) * 100

    = ($1,727.25) : ($624.75) * 100

    = 276.43% or 280%
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