What is the brokerage fee for 150 shares of stock at 11 1/2 per share?

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BeckyB

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A friend's granddaughter has asked me for help on how to figure out a problem and I am stumped. The question is: What is the brokerage fee for 150 shares of stock at 11 1/2 per share? Since this is over 100 shares of stock it would be a round lot and the information for a round lot over $1,000 is that the brokerage fee is $29 + 1.5% of the amount over $1,000. The granddaughter and I both get $39.88, however the answer key says the answer is $53.50. We cannot figure this out. The question also has information for amounts over $100 for both round and odd lots. I've ran the numbers for all of the options and don't get the answer key answer. Any help on how to figure this out would be appreciated.
 
And if you're interested to know we came to our answer this is how we independently solved it:
$11.50 * 150 = $1,725
$1,725 - $1,000 = $725
$725 * 1.5% = $10.88
$29 + $10.88 = $39.88
 
This is the information for the rest of the question:

Amount of purchase​
Rate of commission - Round Lots​
Rate of commission - Odd Lots​
$100 to $1,000​
$6.50 + 2.5% of amount over $100​
$8 + 3% of amount over $100​
$1,000 to $3,000​
$29 + 1.5% of amount over $1,000​
$35 + 2% of amount over $1,000​
 
We can help if you show us your work so we can find your error(s), if any.
This being a help forum no one here is going to solve the problem for you.
It would also be best if your friend's granddaughter communicates with us.
 
Steven G said:
We can help if you show us your work so we can find your error(s), if any.
This being a help forum no one here is going to solve the problem for you.
It would also be best if your friend's granddaughter communicates with us.
Click to expand...
Thank you. This is how we solved it:

$11.50 * 150 = $1,725
$1,725 - $1,000 = $725
$725 * 1.5% = $10.88
$29 + $10.88 = $39.88

If someone can just point us in the right direction that would be amazing. We've both looked through her textbook and researched ways to solve this online. It should be a very simple problem. The answer is supposed to be $53.50, but neither of us are getting that number. We just need an idea on what we're doing wrong.
 
BeckyB said:
A friend's granddaughter has asked me for help on how to figure out a problem and I am stumped. The question is: What is the brokerage fee for 150 shares of stock at 11 1/2 per share? Since this is over 100 shares of stock it would be a round lot and the information for a round lot over $1,000 is that the brokerage fee is $29 + 1.5% of the amount over $1,000. The granddaughter and I both get $39.88, however the answer key says the answer is $53.50. We cannot figure this out. The question also has information for amounts over $100 for both round and odd lots. I've ran the numbers for all of the options and don't get the answer key answer. Any help on how to figure this out would be appreciated.
Click to expand...
I'm getting the same answer (assuming you quote the problem exactly and correctly).
Do you have the source of the question?
 
BeckyB said:
A friend's granddaughter has asked me for help on how to figure out a problem and I am stumped. The question is: What is the brokerage fee for 150 shares of stock at 11 1/2 per share? Since this is over 100 shares of stock it would be a round lot and the information for a round lot over $1,000 is that the brokerage fee is $29 + 1.5% of the amount over $1,000. The granddaughter and I both get $39.88, however the answer key says the answer is $53.50. We cannot figure this out. The question also has information for amounts over $100 for both round and odd lots. I've ran the numbers for all of the options and don't get the answer key answer. Any help on how to figure this out would be appreciated.
Click to expand...
I'm no expert in shares trading but I'm particularly puzzled by what you say here: "150 shares of stock at 11 1/2 per share".

Exactly what is meant by "11 1/2 per share"?

Firstly, does "11 1/2" mean 11\(\displaystyle \frac{1}{2}\) (ie: 11.5)?

and, secondly, is this the share price (in $ or ¢?) or some percentage (and, if so, a percentage of what)?

However (and perhaps more importantly) this looks very much like a re-submission of a previous "enquiry" that was 'addressed' in another thread over a decade ago (here).

There too, the enquiry was submitted on behalf of someone else by a "concerned" older person; perhaps you would care to comment on that thread?
 
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BigBeachBanana said:
I'm getting the same answer (assuming you quote the problem exactly and correctly).
Do you have the source of the question?
Click to expand...
I don't have a picture of the question, but I can try to get an actual picture of the textbook. The granddaughter has written it out twice and she used the exact same numbers both times.
 
The Highlander said:
I'm no expert in shares trading but I'm particularly puzzled by what you say here: "150 shares of stock at 11 1/2 per share".

Exactly what is meant by "11 1/2 per share"?

Firstly, does "11 1/2" mean 11\(\displaystyle \frac{1}{2}\) (ie: 11.5)?

and, secondly, is this the share price (in $ or ¢?) or some percentage (and, if so, a percentage of what)?

However (and perhaps more importantly) this looks very much like a re-submission of a previous "enquiry" that was 'addressed' in another thread (here).

Perhaps you would care to comment on that?
Click to expand...
11 1/2 shares means $11.50 per share. I did see the previous entry, but there wasn't an answer other than a request for additional information and it looked like it was from 2011 so I wasn't sure if anyone would see my post if I commented there.
 
Maybe (in certain cases) they charge $29 + 1.5% on everything over $100 then round (up) their fees to multiples of 50¢?
(Just a thought. ??)

And (apparently) this would be an odd lot not a round lot (as you assumed) as it is not evenly divisible by 100. (See here.)

So the fees are probably subject to different criteria than those you have used to arrive at your answer.
 
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BeckyB said:
This is the information for the rest of the question:

Amount of purchase​
Rate of commission - Round Lots​
Rate of commission - Odd Lots​
$100 to $1,000​
$6.50 + 2.5% of amount over $100​
$8 + 3% of amount over $100​
$1,000 to $3,000​
$29 + 1.5% of amount over $1,000​
$35 + 2% of amount over $1,000​
Click to expand...

A round lot is the number of shares that is divisible by 100, while odd lots can include any number of shares between one and 100.
Since you're buying 150 shares, you have a round lot of 100 shares and an odd lot of 50 shares. You need to calculate those separately using the provided rates.

For the round lot:
\(\displaystyle 29 + 0.015(100\times 11.5-1000) = 31.25\)

For the odd lot:
\(\displaystyle 8 + 0.03(50 \times 11.5-100) = 22.25\)

The total:
[imath]31.25 + 22.25 = 53.50[/imath]
 
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BigBeachBanana said:
A round lot is the number of shares that is divisible by 100, while odd lots can include any number of shares between one and 100.
Since you're buying 150 shares, you have a round lot of 100 shares and an odd lot of 50 shares. You need to calculate those separately using the provided rates.

For the round lot:
\(\displaystyle 29 + 0.015(100\times 11.5-1000) = 31.25\)

For the odd lot:
\(\displaystyle 8 + 0.03(50 \times 11.5-100) = 22.25\)

The total:
[imath]31.25 + 22.25 = 53.50[/imath]
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You are a genius! It has been so long since I've taken a business math class. I completely forgot about this. This all makes sense now. I've been working on this question a lot longer than I'd like to admit.
 
The Highlander said:
Maybe (in certain cases) they charge $29 + 1.5% on everything over $100 then round (up) their fees to multiples of 50¢?
(Just a thought. ??)

And (apparently) this would be an odd lot not a round lot (as you assumed) as it is not evenly divisible by 100. (See here.)

So the fees are probably subject to different criteria than those you have used to arrive at your answer.
Click to expand...
Thank you for your help. I really do appreciate your time.
 
BeckyB said:
Thank you for your help. I really do appreciate your time.
Click to expand...
You're welcome. ?
And it's good that it's finally resolved so that the next time someone's "mother" or "grandmother's friend" comes in looking for the answer we know it's here. ?
 
129 shares is one ”round lot,” meaning a number of shares evenly divisible by 100, plus one “odd lot.”
 
Sales price of round lot is 11.5 * 100 = 1150.

Commission = 29 + 0.015 * (1150 - 1000) = 29 + 0.015 * 150 = 29 + 2.25 = 31.25

Sales price of odd lot is 11.5 * 50 = 575.

Commission = 8 + 0.03 * (575 - 100) = 8 + 0.03 * 475 = 8 + 14.25 = 22.25

31.25 + 22.25 = 53.50.

Answer key is correct.
 
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