Question

Aryan bought 100 shares of a company at Rs. 50 per share. He paid a brokerage fee of 2% on the purchase. Later, he sold all the shares at Rs. 55 per share and paid a brokerage fee of 2% on the sale. What is Aryan's net profit percentage on his investment?

• A. 6%
• B. 5.5%
• C. 6.1%
• D. 5.69%

Hint:

To calculate net profit percentage, first calculate the net profit and then divide by the total investment.

Answer 1

The Correct Option is D

Step 1: Calculate the total amount spent on purchase.
Aryan bought 100 shares at Rs. 50 each, so the total amount spent on the purchase is: \[ \text{Total purchase price} = 100 \times 50 = 5000. \] He paid a brokerage fee of 2% on the purchase price, so the brokerage fee is: \[ \text{Brokerage fee on purchase} = \frac{2}{100} \times 5000 = 100. \] Thus, the total amount spent on the purchase, including the brokerage fee, is: \[ \text{Total amount spent} = 5000 + 100 = 5100. \] Step 2: Calculate the total amount received on sale.
Aryan sold 100 shares at Rs. 55 each, so the total amount received on the sale is: \[ \text{Total sale amount} = 100 \times 55 = 5500. \] He paid a brokerage fee of 2% on the sale amount, so the brokerage fee is: \[ \text{Brokerage fee on sale} = \frac{2}{100} \times 5500 = 110. \] Thus, the total amount received on the sale after the brokerage fee is: \[ \text{Total amount received} = 5500 - 110 = 5390. \] Step 3: Calculate the net profit.
The net profit is the difference between the total amount received and the total amount spent: \[ \text{Net profit} = 5390 - 5100 = 290. \] Step 4: Calculate the net profit percentage.
The net profit percentage is given by: \[ \text{Net profit percentage} = \frac{\text{Net profit}}{\text{Total amount spent}} \times 100 = \frac{290}{5100} \times 100 \approx 5.69\%. \] Thus, the correct answer is: \[ \boxed{5.69\%}. \]