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An investor purchased 100 shares of stock X at 6 1/8 dollars

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Manager
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An investor purchased 100 shares of stock X at 6 1/8 dollars  [#permalink]

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New post 27 Oct 2018, 06:15
chetan2u wrote:
gauravjec wrote:
Hi chetan2u

I solved the question and got the profit percentage as 291.8

291.8 is closed to 300 than 280, hence I marked 300 in the answer choice. Can you please guide where I went wrong in my line of reasoning?

Thanks



The answer is closer to 287..
the reason you are getting 291 is may be you have not taken the brokerage in the total cost investment..


i was checking to see the answers and i seem to be getting b as the answer

cost of shares = 612.5
cost of 2% of cp = 12.25
cost of 2% of sp = 48

total cost = 672.5
total selling price = 2400

profit = 2400 - 672.75 = 1727.5
total cost = 612.5 + 12.25 + 48 = 672.75

% gain = 1727.5 / 672.75 = ~250% = ~240%
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Re: An investor purchased 100 shares of stock X at 6 1/8 dollars  [#permalink]

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New post 20 Sep 2019, 08:12
surupab wrote:
An investor purchased 100 shares of stock X at 6 1/8 dollars per share and sold them all a year later at 24 dollars per share. If the investor paid a 2 percent brokerage fee on both the total purchase price and the total selling price, which of the following is closest to the investor's percent gain on this investment?

(A) 92%
(B) 240%
(C) 280%
(D) 300%
(E) 380%


Given: An investor purchased 100 shares of stock X at 6 1/8 dollars per share and sold them all a year later at 24 dollars per share.

Asked: If the investor paid a 2 percent brokerage fee on both the total purchase price and the total selling price, which of the following is closest to the investor's percent gain on this investment?

Gain = 100 (24 - 6 1/8) - 2 (24 + 6 1/8) = 2400 - 600 - 12.5 - 48 - 12 - .25 = 1800 - 72.75 = 1727.25

% Gain = 1727.25 / 612.5 = 282%

IMO C
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Re: An investor purchased 100 shares of stock X at 6 1/8 dollars  [#permalink]

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New post 25 Sep 2019, 23:10
What did I do wrong? Someone please help me!

my calculation:

24/(6.125+(6.125+24)*0.02)-1 = 2.56

This is far away from the 2.8
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Re: An investor purchased 100 shares of stock X at 6 1/8 dollars  [#permalink]

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New post 25 Nov 2019, 06:18
rohit8865 wrote:
email2vm wrote:
An investor purchased 100 shares of stock X at $6 1/8 (or 49/8 $) per share and sold them all a year later at 24$ per share. If the investor paid a 2% brokerage fee on both the total purchase price and the total selling price, which of the following is the closest to the investors percent gain on the investment.

a> 92%
b> 240%
c> 280%
d> 300%
e> 380%

how would you solve this question. For the first time I realized that I need a some sleep before test.

Ravi


Some simple calculations to be made for this..
buying price = price os total shares+brokerage charges on buy price
=100*49/8 + 2% of (100*49/8)
=624.75$
similarly selling price = 24*100 - 2%of 2400(or u can add this to buy price also)
=2352$
so Profit = SP-CP
=2352-624.75=1727.25$
%= 1727.25/624.75
=2.76 ~ 280%

Ans C


chetan2u

Kindly clarify why the denominator in the expression "%= 1727.25/624.75" is not 612.5+12.25+48= 672.75.
As per my understanding,
total gain= 2400-612.5= 1787.5
brokerage= 12.25+48= 60.25
net profit= 1727.25
net cost= 612.5+12.25+48= 672.75

% profit= 1727.25/672.75 = 257%.
So, closest approx should be 240%.
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Re: An investor purchased 100 shares of stock X at 6 1/8 dollars   [#permalink] 25 Nov 2019, 06:18

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