Question

Erin purchased $ 23,510 worth of stock and paid her broker a 1% broker fee. She sold when the stock price increased to $27,300, and used a discount broker who charged $21 per trade.Compute her net proceeds.What was the purchase cost? What was the sale price?

Net Proceeds = Sale Price - Purchase Cost

Answer 1

To calculate the net proceeds from the stock sale, subtract the purchase cost from the sale price. The purchase cost is $23,510 and the sale price is $27,300. Taking into account the broker fees, the net proceeds is $3,512.90.

Step-by-step explanation:

To calculate the net proceeds, we need to subtract the purchase cost from the sale price. The purchase cost is $23,510, and the broker fee is 1% of the purchase cost, which is $23,510 x 0.01 = $235.10. So the total purchase cost is $23,510 + $235.10 = $23,745.10.

The sale price is $27,300, and the discount broker fee is $21 per trade. Since there are two transactions (buying and selling), the total broker fee is $21 x 2 = $42. So the net proceeds is $27,300 - $23,745.10 - $42 = $3,512.90.