When you buy or sell stocks, you will need a broker. A stock broker charges a fee called a commission. Here are the equations to calculate the costs and profits or losses of buying and selling stocks:

Cost of purchase: (stock price) ´ (number of shares bought) + commissions

Proceeds from selling: (stock price) ´ (number of shares sold) - commissions

The difference of the proceeds and costs will tell you if you made or lost money. The commission can be a percentage of the purchase price or a fixed fee. A discount broker usually charges \$15 to 30 commission per transaction. A full- service broker usually charges \$50 to 120 for buying or selling 100 shares of stock. You pay a commission when you buy or sell stocks.

The share price of IBM is at \$115 3/4. You buy 100 shares of IBM and pay 2%
commission.  What is the total cost of the purchase?

 Share price 115 3/4 Convert to decimal 115.75 How many shares you are going to buy x 100.00 Multiply to get cost of shares = \$11, 575.00 Cost of shares again here 11, 575.00 Broker's commission rate x 0.02 Multiply to get broker's charge = \$231.50 Add the two numbers to get total cost of purchase 11, 575.00 + 231.50 Total cost of purchase = \$11, 806.50

Selling stocks:

The share price of IBM is at \$135 5/8 six months later. You sell all 100 shares of IBM.
Here are the steps to find the proceeds from selling the stocks:

 New share price 135 5/8 Convert to decimal 135.63 Number of shares sold x 100.00 Multiply to get new value of stocks = \$13, 563.00 New value of stocks again here 13, 563.00 Original cost of shares - 11, 806.50 Final value = \$1, 756.50

Broker’s commission

 New value of stocks 13, 563.00 Broker's commission rate x 0.02 Multiply to get amount for commissions = \$271.20

Profit or loss

 Profit again here 1, 756.50 Broker's commission - 271.20 Subtract to get final profit of investment = \$1, 485.30

With \$10,000 David bought Boeing at \$41 1/2 with a 3% broker's fee. If he sold at \$47 3/4 over the Internet with a broker's fee of \$30 per transaction, how much of a profit would he make?