Answer:His net profit is $300
Step-by-step explanation:
Total amount borrowed is $2000. The loan has an annual interest rate of 8 percent. It was borrowed for only six months. This amount of interest paid will be determined using the simple interest formula,
I = PRT/100
Where
P = principal = $2000
R = rate = 8%
T = time = 6 months = 0.5 years
I = interest
I = (2000× 8 × 0.5)/100 = 80
The interest that will be paid for $2000 is $80
Total amount paid back is 2000 + 80 = $2080
He bought 100 shares at $60.00 per share and the total is $6,000
He sold the stock for $65 per share. This means that the total amount for which he sold the stock is 65×100 = $6500.
To determine his profit, we would subtract the total amount paid back due to the loan, the commission and his initial cash from the total amount recovered from selling his stock.
It becomes
6500 - ( 2080 + 120 + 4000)
= 6500 - 6200 = 300
His net profit is $300
