Question

Mackin Investing charges its customers a 1% commission. The Ross Group, a discount broker, charges $25 per trade. For what amount of stock would both brokers charge the same commission?

Answer 1

Answer:

The amount of stock for which both brokers would charge the same commission is $2500.

Step-by-step explanation:

i) Let the amount of stock to be traded be worth $x

ii) therefore for both the brokers to charge the same commission we can write

   1% of x  = $25 $\RIghtarrow$$\Rightarrow$  0.01 $\times$ x  = 25  $\therefore$   x = $\frac{25}{0.01} = 2500$

The amount of stock for which both brokers would charge the same commission is $2500.