Explanation Given Information: The number of shares, purchase price, selling price and commissions on buy, sell and odd lot for the company Freeport Inc. are 350 , $ 18.42 , $ 29.19 , 2 % , 2 % and add 1 % respectively. Formula used: Calculate total cost of purchase, value of shares and gain (or loss) on transaction, by following the steps mentioned below: Step I: Calculate cost of shares by using the formula: Cost of shares = Price per share × Number of shares Step II: Calculate broker’s commission by using the formula: Broker's commission = cost of shares × Commission rate Step III: Next calculate total cost of purchasing by using the formula: Total cost = Cost of shares + Broker's commission . Step IV: Then calculate value of shares as,: Value of shares = Price per share × Number of shares Step V: Calculate value of shares by using the formula, Proceeds = Value of shares − Broker's commission . Step VI: Finally calculate gain (or loss) on transaction as: Gain/Loss on transaction = Proceeds − Total cost Calculation: The price per share is $ 18.42 and the number of shares is 350. Then calculate cost of shares as, Cost of shares = Price per share × Number of shares = 18.42 × 350 = 6 , 447 Next calculate Broker’s commission. The commission on buy and sell is 2 % . Then, Broker's commission = cost of shares × Commission rate = 300 × 18.42 × 0.02 = 110.52 The commission on odd lot was to add 1 % to the 2 % commission of buy and sell. Then, Odd lot commission = 50 × 18.42 × .03 = 27.63 The total commission would be sum of buy, sell and odd lot commission as, Total commission = 110

Contemporary Mathematics for Business & Consumers

8th Edition

ISBN: 9781305585447

Author: Robert Brechner, Geroge Bergeman

Publisher: Cengage Learning

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Chapter 20.I, Problem 21RE

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To calculate: The total cost, proceed, and gain (or loss) for the company Freeport Inc. when the number of shares, purchase price, selling price and commissions on buy, sell and odd lot are 350,$18.42,$29.19,2%,2% and add 1% respectively.

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Chapter 20.I, Problem 20RE

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Chapter 20 Solutions

Contemporary Mathematics for Business & Consumers

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The total cost, proceed, and gain (or loss) for the company Freeport Inc. when the number of shares, purchase price, selling price and commissions on buy, sell and odd lot are 350 , $ 18.42 , $ 29.19 , 2 % , 2 % and add 1 % respectively.

Solution Summary: The author explains how to calculate the total cost of purchase, value of shares, and gain (or loss) for the company Freeport Inc.

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To calculate: The total cost, proceed, and gain (or loss) for the company Freeport Inc. when the number of shares, purchase price, selling price and commissions on buy, sell and odd lot are 350,$18.42,$29.19,2%,2% and add 1% respectively.

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Chapter 20 Solutions