Roy Landers bought 3,000 shares of stock for $59 per share. Six months later he sold the 3,000 shares of stock for $75 per share. If the stockbroker's commission was $975, how much profit did Roy make on the transaction?
3000(75-59) - 975 = 47025
To find the profit that Roy made on the transaction, we need to calculate the difference between the selling price and the buying price, excluding the commission.
1. Buying Price: Roy bought 3,000 shares of stock for $59 per share.
Therefore, the total buying price = 3,000 * $59 = $177,000.
2. Selling Price: Roy sold the 3,000 shares of stock for $75 per share.
Therefore, the total selling price = 3,000 * $75 = $225,000.
3. Commission: The stockbroker's commission was $975.
To calculate the profit, we need to subtract the buying price from the selling price and then subtract the commission:
Profit = Selling price - Buying price - Commission
Profit = $225,000 - $177,000 - $975
Profit = $47,025.
Therefore, Roy made a profit of $47,025 on the transaction.
To calculate the profit made by Roy Landers on the transaction, we need to find the total cost of buying the shares and subtract it from the total revenue earned from selling the shares, minus the stockbroker's commission.
First, let's calculate the total cost of buying the shares:
Total cost = number of shares * price per share
Total cost = 3000 shares * $59/share
Total cost = $177,000
Next, let's calculate the total revenue earned from selling the shares:
Total revenue = number of shares * price per share
Total revenue = 3000 shares * $75/share
Total revenue = $225,000
Now we need to subtract the stockbroker's commission from the total revenue:
Net revenue = total revenue - stockbroker's commission
Net revenue = $225,000 - $975
Net revenue = $224,025
Finally, to calculate the profit, we subtract the total cost from the net revenue:
Profit = net revenue - total cost
Profit = $224,025 - $177,000
Profit = $47,025
Therefore, Roy Landers made a profit of $47,025 on the transaction.