Entry Task Twice a number increased by 10 equals 52, and 115 less than 3 times the number also equals 52 Write two quations that represent this situation Solve your equations 2x + 10 = 52 and 115 – 3x = 52 2x + 10 = 115 – 3x 5x = 105 X = 21

1-7 STOCK TRANSACTION FEES Banking 5/7/2018 1-7 STOCK TRANSACTION FEES OBJECTIVES Compute the fees involved in buying and selling stocks. Become familiar with the basic vocabulary of stock trading. Chapter 1

Key Terms stockbroker broker fee commission discount broker Banking 5/7/2018 Key Terms stockbroker broker fee commission discount broker at the market limit order net proceeds Chapter 1

How do you buy and sell stock? Banking 5/7/2018 How do you buy and sell stock? How has the Internet changed the way stock is traded? Chapter 1

Banking 5/7/2018 Example 1 Lee made two trades through his online discount broker, We-Trade. We-Trade charges a fee of $12 per trade. Lee’s first purchase was for $3,456 and his second purchase, later in the day, was for $2,000. How much did he spend on the day’s purchases, including broker fees? 2 trade at $12 each is $24 3456 + 2000 = 5456 5456 + 24 = $5480 Chapter 1

CHECK YOUR UNDERSTANDING Banking 5/7/2018 CHECK YOUR UNDERSTANDING Garret made two trades in one day with his discount broker that charges $7 per trade. Garret’s first purchase was for $1,790 and his second purchase was for $8,456. How much did he spend including broker fees? $10,260 Chapter 1

Banking 5/7/2018 Example 2 Adriana purchased $7,000 worth of stock from a broker at Tenser Brokerage. The current value of Adriana’s portfolio is $11,567. What broker fee must she pay? .005*7000 + 15 = $50 Chapter 1

CHECK YOUR UNDERSTANDING Banking 5/7/2018 CHECK YOUR UNDERSTANDING Jared has a portfolio worth $500,000. He made 10 telephone trades during the past year, buying and selling $50,000 worth of stock. What was his total broker fee for the year? Express his total broker fee algebraically if Jared had made b automated telephone trades. 12b + 9.5b = 21.5b 12*10 + 9.5 *10 =$215 Chapter 1

Banking 5/7/2018 EXAMPLE 3 Erin purchased $23,510 worth of stock and paid her broker a 1% broker fee. She sold when the stock price increased to $27,300, and used a discount broker who charged $21 per trade. Compute her net proceeds. 23510 * .01 = $235.10 $235.10 + $21 = $256.10 in total fees 27,300 – 23,510 = $3790 is what she made 3790 – 256.1 = $3533.9 net earnings Chapter 1

CHECK YOUR UNDERSTANDING Banking 5/7/2018 CHECK YOUR UNDERSTANDING Yolanda purchased stock for $7,000 and paid a 1.5% broker fee. She sold it for $6,325 and paid a 0.5% broker fee. Compute her net proceeds. -$811.63 Chapter 1

Banking 5/7/2018 EXAMPLE 4 Johan purchased stock six years ago for x dollars and paid a 2% broker fee. He sold that stock yesterday for y dollars and paid a discount broker $35 for the sale. Express his net proceeds algebraically. Purchase cost = cost of stock + broker fee = x + .02x Sale proceeds = sale price of stock – broker fee = y-35 Net proceeds = sale proceeds – purchase cost = (y-35) – (x+.02x) Simplify = y-35-1.02x Chapter 1

Assignment P. 43 #2-7, 9,10, 12,13

CHECK YOUR UNDERSTANDING Banking 5/7/2018 CHECK YOUR UNDERSTANDING Rob purchased stock for p dollars and paid a flat $40 broker fee. Rob needed money for a home improvement so he sold it at a loss, for h dollars, plus a 1% broker fee. Express his net proceeds algebraically. (h-.01h) – (p+40) Or .99h – p - 40 Chapter 1