Question

An investor purchased 500 shares of a stock at $19 per share. The commission she paid to buy the stock was $65 plus 0.3% of the principal amount. What was the total cost for the investor to purchase the 500 shares?

Answer 1

The total cost for an investor to buy 500 shares at $19 per share, including a $65 commission and 0.3% of the principal amount, is $9593.50.

Step-by-step explanation:

The total cost for an investor to purchase 500 shares of a stock at $19 per share with a commission of $65 plus 0.3% of the principal amount is calculated as follows:

1. First, multiply the number of shares by the price per share to find the principal amount: 500 shares × $19 = $9500.
2. Next, calculate the commission based on the principal amount. Since the commission is $65 plus 0.3% of $9500, calculate 0.3% of $9500: 0.003 × $9500 = $28.50.
3. Add the fixed commission to the percentage commission to get the total commission paid: $65 + $28.50 = $93.50.
4. Finally, add the total commission to the principal amount to get the total cost to buy the shares: $9500 + $93.50 = $9593.50.

Therefore, the total cost for the investor to purchase the 500 shares is $9593.50.