Question

Samantha invested in the Graham Corporation. Samantha bought n number of shares for d dollars and paid a 2% commission to her broker. She later sold the stock for s dollars and paid a flat fee of $11. A friend of Samantha’s, Alex, also decided to invest in the Graham Corporation. He purchased x dollars worth of stock on his broker’s advice and paid his broker a 1% broker fee.

Answer 1

Net Proceeds = Selling Price - Total Cost Price

a. Samantha

Total Cost Price;

Bought shares for d dollars and paid 2% commission = d + (d * 2%) = 1.02d

Selling Price;

Sold stock for s dollars and paid flat fee of $11 = s - 11

Net Proceeds = (s - 11) - 1.02d

b. Alex

Total Cost Price;

Bought x dollars worth and paid 1% commission = x + (x * 1%) = 1.01 * x = 1.01x

Selling Price;

Value falls to y and Alex pays 1.25% when he sells = y - (y * 1.25%) = y - 0.0125y = 0.9875y

Net Proceeds = 0.9875y - 1.01x