Question

A stockbroker earns a commission by a flat fee for each transaction as well as a fee per share. On a particular transaction, the stockbroker sold 5,000 shares to a client at a rate of $0.01 per share. The cost of the transaction totaled $57.50. Which of the following equations describes the cost of this transaction in terms of shares sold?

A.y = 0.01x
B.y = 0.01x + 7.5
C.y = 0.01x + 4,999.425
D. y = 0.01x + 5,000

Answer 1

Clearly, alternative B

y = 0.01x + 7.5
y = (0.01)*5000 + 7,5
y = 50 + 7.5
y = 57.50

Answer 2

Option B. y = .01x + 7.5

Explanation:

If a stock broker earns a commission by a flat fee for each transaction as well as a fee per share.

Let the commission on each share charged by the stock broker is x.

Selling price of 5000 shares + total fees of broker = Cost of the transaction

5000×.01 + Fees = 57.50

Fees = 57.50 - 50 = $7.50

Now we can form the equation which represents the cost of this transaction as

y = .01x + 7.5

Therefore option B is the correct answer.