Question

During 2022, Amy Ward purchased 250 shares of common stock issued by New Generation Electronics for $9600 including commission. Later in the same year, Amy sold the shares for $10,500 after commission. Calculate the following. (Round all answers to two decimal places.)

Answer 1

To calculate Amy Ward's net profit, subtract the total purchase cost from the total selling amount. With Amy's initial investment of $9600 and a selling price of $10,500, her net profit from her stock transaction would be $900.

Step-by-step explanation:

The question involves calculating the net profit from the buying and selling of shares. In Amy Ward's case, she bought 250 shares at an initial cost, including commission, and sold them later at a higher price, also after deducting commission. To find the net profit, we subtract the purchase price from the selling price and then deduct any fees (commissions).

Here is how you would calculate it:

• Purchase price + Commission = Total purchase cost
• Selling price - Commission = Total selling amount
• Total selling amount - Total purchase cost = Net profit

For Amy's transaction:

• Total purchase cost = $9600 (given)
• Total selling amount = $10,500 (given)
• Net profit = $10,500 - $9600 = $900

The net profit from the stock transaction is $900.