Question

Mary Kim invested ​$970 in 17 shares of stock. A month​ later, she sold the 17 shares at ​$60.63 per share. She also invested in 250 shares of stock for a total of ​$22,162.50. She sold this stock for ​$81.19 a share and paid ​$520 in total commissions. What was Mary​ Kim's profit or loss on the transactions to the nearest​ dollar?

a) $1,520
b) $2,020
c) -$1,520
d) -$2,020

Answer 1

Mary Kim's profit or loss on the transactions is -$1,827.

Step-by-step explanation:

To calculate Mary Kim's profit or loss, we need to determine the cost of her investments and the proceeds from selling the stocks.

1. For the first investment, Mary Kim spent $970 to purchase 17 shares. She sold them for $60.63 each, so the proceeds from this sale are 17 * $60.63 = $1030.71.
2. For the second investment, Mary Kim spent $22,162.50 to purchase 250 shares. She sold them for $81.19 each, so the proceeds from this sale are 250 * $81.19 = $20,297.50.

Now let's calculate the total commissions Mary Kim paid. She paid $9.99 per transaction for the 17 shares and $12.99 per transaction for the 250 shares, so the total commissions are $9.99 + $12.99 = $22.98.

To calculate Mary Kim's profit or loss, we subtract the total cost of her investments (the amount spent) from the total proceeds from selling the stocks:

Total proceeds = proceeds from first investment + proceeds from second investment

Total cost = amount spent + commissions

Profit/Loss = Total proceeds - Total cost

Profit/Loss = ($1030.71 + $20,297.50) - ($970 + $22,162.50 + $22.98)

Profit/Loss = $21,328.21 - $23,155.48

Profit/Loss = -$1,827.27

Therefore, Mary Kim's profit or loss on the transactions is -$1,827.27, which to the nearest dollar is -$1,827.