Question

What is the rate of return when 15 shares of stock A, purchased for $25/share, are sold for $475? The commission on the sale is $6 what is the total cost

Answer 1

25.07%.

Step-by-step explanation:

To calculate the rate of return, we need to determine the total cost and the total earnings from the sale of the 15 shares of stock A. Let's break down the calculation step by step:

Step 1: Calculate the total cost:

Total cost = Number of shares * Purchase price per share

Total cost = 15 * $25

Total cost = $375

Step 2: Calculate the total earnings:

Total earnings = Sale price - Commission

Total earnings = $475 - $6

Total earnings = $469

Step 3: Calculate the rate of return:

Rate of return = (Total earnings - Total cost) / Total cost * 100

Rate of return = ($469 - $375) / $375 * 100

Rate of return = $94 / $375 * 100

Rate of return ≈ 25.07%

Therefore, the rate of return when selling the 15 shares of stock A for $475, with a commission of $6, is approximately 25.07%.

Answer 2

To calculate the rate of return, multiply the number of shares by the purchase price per share to find the total cost, and multiply the number of shares by the selling price per share to find the total proceeds. Subtract the commission from the proceeds to find the net proceeds. Finally, divide the net proceeds by the total cost and multiply by 100 to calculate the rate of return.

Step-by-step explanation:

To calculate the rate of return, we need to first calculate the cost of purchasing the shares and the proceeds from selling the shares. The cost of purchasing the shares is calculated by multiplying the number of shares (15) by the purchase price per share ($25), so the total cost is 15 * $25 = $375. The proceeds from selling the shares is calculated by multiplying the number of shares (15) by the selling price per share ($475), so the total proceeds is 15 * $475 = $7125. We subtract the commission from the proceeds, so the net proceeds is $7125 - $6 = $7119. The rate of return is calculated by dividing the net proceeds ($7119) by the total cost ($375), and then multiplying by 100 to express it as a percentage.

The rate of return is ($7119 / $375) * 100 = 1898.4%.