# You purchase 259 shares of Sonic Corporation for $24.38 per share. What is the total cost of your purchase? You later sell your shares at the current market price of$22.12. How much money was your profit or loss? Explain how you calculated your answer.

Feb 14, 2018

See a solution process below:

#### Explanation:

Part A:

We can find the total cost of the purchase by multiplying the number of shares by the prices per share giving:

$259 \text{shares" xx ($24.38)/"share} \implies$$259 \textcolor{red}{\cancel{\textcolor{b l a c k}{\text{shares"))) xx ($24.38)/color(red)(cancel(color(black)("share}}}} \implies$

259 xx $24.38 =>$6314.42

Part B:

We can do the same calculation to find what was made by selling the 259 shares at $22.12: $259 \text{shares" xx ($22.12)/"share} \implies$

$259 \textcolor{red}{\cancel{\textcolor{b l a c k}{\text{shares"))) xx ($22.12)/color(red)(cancel(color(black)("share}}}} \implies$259 xx$22.12 => $5729.08 The profit or loss is found by subtracting what you paid from what you made. Or, in this problem: $5729.08 - $6314.42 = -$585.34

#### Explanation:

You buy 259 shares with each one costing $24.38. In order to calculate the total amount of money it costs you need to multiply the two numbers. "Total" = 259 *$24.38 = $6314.42 Later the shares are sold at$22.12, to calculate the amount of money lost/gained you need to first know how much you are selling the shares for. The amount of shares remains the same.

"Selling Price" = 259 * $22.12 =$5729.08

Now we calculate the difference of the starting amount and the resulting amount.

"Difference" = $6314.42 -$5729.08 = \$585.34

Although this number is positive it still represents a loss of money because we are subtracting the outcome from the original amount.

Side Note: You could tell from the beginning that this was a loss of money because the selling price was less than the buying price.