Question

Jill Bower purchased 175 shares of stock for $20 a share and sold it for $30 a share. The commissions required to buy and sell her stock totaled $50 for each transaction. Assuming she received no dividends during the time she owned the stock, what is her total investment on the purchase of this stock?

A) $5,200

B) $3,250

C) $5,300

D) $3,550

E) $5,500

Answer 1

Jill's total investment in the purchase of the stock is $8,850.

Step-by-step explanation:

To calculate Jill's total investment in the purchase of the stock, we need to consider the cost of buying the stock, the cost of selling the stock, and the commissions for each transaction.

1. Cost of buying the stock: 175 shares purchased at $20 per share = $175 * $20 = $3,500.

2. Cost of selling the stock: 175 shares sold at $30 per share = $175 * $30 = $5,250.

3. Commissions for each transaction: $50 for buying + $50 for selling = $100.

Therefore, Jill's total investment on the purchase of the stock is the sum of the cost of buying, the cost of selling, and the commissions: $3,500 + $5,250 + $100 = $8,850.