Question

Rema purchased 18 ounces of gold in 2005 for $414 per ounce in order to try to diversify her investment portfolio. She sold a third of her holdings in gold in 2009 at a price $953 per ounce. She sold the rest of her gold holdings in 2010 for $1,367 per ounce.
What is Prema’s profit in 2009 and 2010?

Answer 1

Given :

Rema purchased 18 ounces of gold in 2005 for $414 per ounce in order to try to diversify her investment portfolio.

She sold a third of her holdings in gold in 2009 at a price $953 per ounce. She sold the rest of her gold holdings in 2010 for $1,367 per ounce.

To Find :

What is Prema’s profit in 2009 and 2010.

Solution :

Price of one third ounces of gold, in 2005 is :

P = $414/3 = $138 .

Profit from selling them in 2009 is :

P1 = $(953 - 138) = $815 .

Profit from selling them in 2010 is :

P2 = $( 1367 - ( 414 - 138 ) ) = $1091 .

Therefore, Prema's profit in 2009 is $815 and 2010 is $1091.

Hence, this is the required solution.