Question

A broker charges customers a fixed fee of £150 plus 5.50% of the amount of all investments made. If a customer invests £40 000 through the broker, what is the total brokerage payable?

(10 Marks)

Answer 1

Total payable brokerage = £2350

Explanation:

Given that:

Fixed fee charged by broker = £150

Percent of fee charged = 5.50%

Amount invested by customer = £40,000

Fee charged =
`(5.50)/(100)*40000`

Fee charged = 5.50 * 400 = £2200

Total brokerage payable = £150 + £2200 = £2350

Hence,

Total payable brokerage = £2350