# Business - Commission and Interest Rate

by Bon

(Pa)

The buying and selling commission schedule shown below is from a well-known online discount brokerage house.

Transaction Size Commission Rate

$0-$2,500 $19+ 1.6% of principal

$2,501-$6,000 $44 + 0.6% of principal

$6,001-$22,000 $62 + 0.3% of principal

$22,001-$50,000 $84 + 0.2% of principal

$50,001-$500,000 $134 + 0.1% of principal

$500,001+ $234+ 0.08% of principal

1. Show that the commission on 500 shares at $15 per share is $84.50?

2. Taking into consideration the buying and selling commissions in the schedule find annual rate of interest earned by each investment?

An investor purchases 500 shares at $14.20 a share, holds the stock for 39 weeks, and then sells the stock for $16.84 a share.