by: Bunuel
27 mins
by: Bunuel
28 mins
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Difficulty:
35%
(medium)
Question Stats:
74% (02:18) correct
26%
(02:36)
wrong
based on 72
sessions
History
Date
Time
Result
Not Attempted Yet
Jerome anticipated that the WebWeb.com stock price would fall and sold all his WebWeb.com stocks for $5 per stock. He paid $10,000 tax on the revenue. A week later, Jerome became convinced that the WebWeb.com stock price would rise, and he used the money that he had gotten from selling the WebWeb.com stocks to purchase them again, this time at $6 per stock. If Jerome ended up having 4000 WebWeb.com stocks fewer than the number he had before selling them, how many WebWeb.com stocks did he have originally?
A. 10,000
B. 11,600
C. 12,000
D. 14,000
E. 16,400
_________________
A. 10,000
B. 11,600
C. 12,000
D. 14,000
E. 16,400
_________________
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Posts: 4,849
If we assume that Jerome had ‘x’ stocks originally,
Money he earned by selling these stocks at $5 per stock = $5x
Of this, he had to pay $10,000 as tax; this means he was left with (5x – 10000) using which he bought stocks at $6 per stock.
Number of such stock bought = \(\frac{5x – 10000}{ 6}\) which is 4000 stocks lesser than x.
Therefore, \(\frac{5x – 10000 }{ 6}\) = x – 4000.
Solving this equation, we obtain x = 14000. So, Jerome had 14000 stocks originally.
The correct answer option is D
An alternative strategy to solve this question here would be back-solving starting with option C.
Hope that helps!
Aravind B T
Money he earned by selling these stocks at $5 per stock = $5x
Of this, he had to pay $10,000 as tax; this means he was left with (5x – 10000) using which he bought stocks at $6 per stock.
Number of such stock bought = \(\frac{5x – 10000}{ 6}\) which is 4000 stocks lesser than x.
Therefore, \(\frac{5x – 10000 }{ 6}\) = x – 4000.
Solving this equation, we obtain x = 14000. So, Jerome had 14000 stocks originally.
The correct answer option is D
An alternative strategy to solve this question here would be back-solving starting with option C.
Hope that helps!
Aravind B T
Abhishek009
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Bunuel
Plug in the options to solve...........
Original Value of shares is 14000*5 = 70,000
Amount he had after tax = 70,000 - 10,000 = 60,000
No of shares bought after a week = 60,000/6 = 10,000
Diff is 14000 - 10000 = 4000, Answer must be (D)...
_________________
To calculate the original number of stocks, we just need to set up two equations and solve them by substituting.
x = number of stocks (original)
1. Revenue from selling x stocks (value of stocks minus tax)
R = 5x - 10,000
2. New Purchase P for 6 dollars per stock (number of stocks new = number of stocks originally - 4,000)
P = 6 * (x-4,000)
Since we know that the amount of his purchase P equals the amount of his revenue R, we can say R = P
R = P
5x - 10,000 = 6 * (x-4,000)
x = 14,000
x = number of stocks (original)
1. Revenue from selling x stocks (value of stocks minus tax)
R = 5x - 10,000
2. New Purchase P for 6 dollars per stock (number of stocks new = number of stocks originally - 4,000)
P = 6 * (x-4,000)
Since we know that the amount of his purchase P equals the amount of his revenue R, we can say R = P
R = P
5x - 10,000 = 6 * (x-4,000)
x = 14,000
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