Question

If you bought 600 shares of stock for $41 per share, paid 1% commission , and then sold them 6 months later for $41.75 per share , with a $30 flat fee , are your net proceeds positive or negative? Explain.

Answer 1

Total value of stocks purchased = 600*41 = $24,600

The commission paid = 1% = 0.01 *24,600 = $246

Total purchase cost = $24,600 + $246  = $24,846

Sale price = $41.75

Total sale proceeds = 41.75*600  = $25,050

There is a flat commission of $30 on the sale

Total sale proceeds after commission = $25,050 -$30 = $25,020

Net proceeds = Total sales vale - total purchase cost

Net proceeds = 25,020 - 24,846  = $204 (profit)

Since we have a profit, the answer is sale proceeds are positive