Question
A trader buys 500 shares of a company at ₹240 each. He
pays a 0.5% brokerage on the purchase. After two months, he sells all shares at ₹260 each, paying 0.5% brokerage on the sale. Find his net profit and percentage return on the total investment.Solution
ATQ,
Buying cost: Price per share = ₹240 Brokerage = 0.5% of 240 = 1.2 Total cost per share = 240 + 1.2 = 241.2 Total investment = 500 × 241.2 = ₹120,600 Selling proceeds: Selling price per share = ₹260 Brokerage = 0.5% of 260 = 1.3 Net sale price per share = 260 − 1.3 = 258.7 Total sale proceeds = 500 × 258.7 = ₹129,350 Profit: Profit = 129,350 − 120,600 = ₹8,750 Percentage return = (8750 / 120,600) × 100 = 7.25% Hence, Net Profit = ₹8,750 and Percentage Return = 7.25%
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