Jack has two bank accounts that total $1,041.50. The first bank account has 35.1% less money than the second bank account.
What is the difference between the first and second bank account?
You can receive updates of this contest by subscribing to “DVBEupdate” on Twitter or by being a fan of “Dave Volek’s Business English” on Facebook.
Saturday, June 4, 2011
Solution to Contest #7
Jack bought 120 shares of ABC Banking for $12.27 each. He sold the shares 90 days later for 21.48% more than he paid. When he held the shares, ABC Bank paid a dividend of $0.55 per share. Brokerage fees are $25 or 0.5% of transaction amount, whichever is higher.
How much profit did Jack make with this investment?
Original Investment
Share Investment = 120 x $12.27 = $1,472.40
Brokerage Fees = $1,472.40 x 0.005 = $7.36. Since this was less than $25.00, the $25.00 fee was charged.
Total Investment = $1,472.40 + $25.00 = $1,497.40
Proceeds of Sale
Share price at sale = $12.27 x 1.2148 = $14.91
Total Sale Proceeds = $14.91 x 120 = $1,789.20
Brokerage Fees = $1,789.20 x 0.005 = $8.95. Since this was less than $25.00, the $25.00 fee was charged.
Total Proceeds of Sales = $1,789.20 - $25.00 = $1,764.20
Gain on Sales = $1,764.20 - $1,497.40 = $266.80
Dividends Paid = 120 x $0.55 = $66.00
Total Profit = $266.80 + $66.00 = $332.80
How much profit did Jack make with this investment?
Original Investment
Share Investment = 120 x $12.27 = $1,472.40
Brokerage Fees = $1,472.40 x 0.005 = $7.36. Since this was less than $25.00, the $25.00 fee was charged.
Total Investment = $1,472.40 + $25.00 = $1,497.40
Proceeds of Sale
Share price at sale = $12.27 x 1.2148 = $14.91
Total Sale Proceeds = $14.91 x 120 = $1,789.20
Brokerage Fees = $1,789.20 x 0.005 = $8.95. Since this was less than $25.00, the $25.00 fee was charged.
Total Proceeds of Sales = $1,789.20 - $25.00 = $1,764.20
Gain on Sales = $1,764.20 - $1,497.40 = $266.80
Dividends Paid = 120 x $0.55 = $66.00
Total Profit = $266.80 + $66.00 = $332.80
Subscribe to:
Posts (Atom)
