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Student

Date

Period

12-3

Determining the Total Cost of a Stock Investment

Another way of investing your money is to buy stocks. Purchasing a share of stock makes you a part owner in the corporation that issues you the stock. A stock certificate represents proof of ownership. The total cost of your stock depends on the cost per share, the number of shares you purchase, and the stockbroker’s commission.

Example

Find the total cost of stock.

Morgana LeFey purchased 50 shares of stock at $218.00 per share. If her broker charged her a 1 percent commission on the cost of the stock, what is the total amount she paid for the stock?

  • 1.

    Find the cost of the stock. Cost of Stock Number of Shares Cost per Share 50 $218 $10,900

  • 2.

    Find the broker’s commission. Broker’s commission $10,900 1% $109

  • 3.

    Find the total cost of the stock. Total Paid Cost of Stock Commission $10,900 $109 $11,009 total cost

Practice Find the cost of the stock and the total amount paid.

$100.00

b.

$250.00

b.

1% of total cost

b.

$0.18 per share

b.

1.

250

$ 57.00

a.

2.

100

215.50

a.

3.

375

41.75

a.

4.

425

132.95

a.

Commission

Total Paid

Number of

Cost per

Cost of

Shares

Share

Stock

  • 5.

    Al Holman purchased 75 shares of stock at $37.75 per share. If his broker charged a 1.5 percent commission on the cost of the stock, what was the total paid?

  • 6.

    Marybeth Evanston purchased 2,000 shares of stock at $3.15 per share. The broker’s commission was $29.95 for less than 1,000 shares, or $0.03 per share for 1,000 or more. What was the total amount Evanston paid for her stock?

  • 7.

    Felix Capistrano bought 50 shares of shipping stock at $25 per share and 30 shares of airline stock at $45 per share. The broker’s fee is $15 per transaction. What is the total combined amount Capistrano paid for his stock?

  • 8.

    Standardized Test Practice Robert and Katie Masterson bought 99 shares of oil stock at a price of $55 per share and 150 shares of stock in a steel company at $24 per share. The broker’s com- mission is $25 for transactions under 100 shares and $0.20 per share for transactions over 100 shares. What is the total combined amount that the Mastersons paid for both stock transactions?

A. $9,100.00

B. $9,094.80

C. $9,095.00

D. $9,045.00

82

Section 12-3

Study Guide

Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.

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