A trader bought 100 shares at $20 each and sold them at $25 each. What is the to

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Question: A trader bought 100 shares at $20 each and sold them at $25 each. What is the total profit?

Options:

Correct Answer: $500

Solution:

Total Profit = (Selling Price - Cost Price) * Number of Shares = (25 - 20) * 100 = $500

A trader bought 100 shares at $20 each and sold them at $25 each. What is the total profit?

A trader bought 100 shares at $20 each and sold them at $25 each. What is the total profit?

Step 1: Identify the cost price of each share. The cost price is $20.
Step 2: Identify the selling price of each share. The selling price is $25.
Step 3: Calculate the profit made on each share by subtracting the cost price from the selling price. Profit per share = Selling Price - Cost Price = 25 - 20.
Step 4: Calculate the profit per share. Profit per share = 5.
Step 5: Identify the total number of shares sold. The total number of shares is 100.
Step 6: Calculate the total profit by multiplying the profit per share by the total number of shares. Total Profit = Profit per share * Number of Shares = 5 * 100.
Step 7: Calculate the total profit. Total Profit = 500.

Profit Calculation – Understanding how to calculate profit by subtracting the cost price from the selling price and multiplying by the number of shares.