Question

Two years ago, you purchased 174 shares of IBM stock for $118 a share. Today, you sold your IBM stock for $133 a share. For this problem, ignore commissions that would be charged to buy and sell your IBM shares and dividends you might have received as a shareholder. What is the amount of profit you earned on each share of IBM stock? What is the total amount of profit for your IBM investment?

Answer 1

The profit earned on each share of IBM stock was $15, and the total profit for the 174 shares sold amounted to $2,610.

Step-by-step explanation:

To calculate the amount of profit earned on each share of IBM stock, you subtract the purchase price per share from the selling price per share. The purchase price was $118 per share, and the selling price was $133 per share.

Profit per share = Selling price per share - Purchase price per share
Profit per share = $133 - $118
Profit per share = $15

To calculate the total amount of profit for your IBM investment, you multiply the profit per share by the total number of shares sold.

Total profit = Profit per share × Number of shares
Total profit = $15 × 174
Total profit = $2,610