How Much Profit did Prema Make from Selling a Third of her Gold Holdings in 2009?
What was Prema's profit from selling a third of her gold holdings in 2009?
If Prema purchased 24 ounces of gold in 2005 for $409 per ounce and sold a third of her holdings in 2009 at a price of $963 per ounce, what would her profit have been?
Profit Calculation:
Prema purchased 24 ounces of gold in 2005 for $409 per ounce.
To calculate the total investment cost: Total investment cost = 24 ounces × $409/ounce
Next, Prema sold a third of her gold holdings in 2009 at a price of $963 per ounce.
To calculate the amount received from the sale: Amount received from sale in 2009 = (24 ounces ÷ 3) × $963/ounce
Finally, Prema's profit: Profit from selling in 2009 = Amount received from sale in 2009 - Total investment cost
Therefore, Prema's profit from selling a third of her gold holdings in 2009 would be the amount received from the sale minus the total investment cost.
Detail Explanation:
Prema's profit from selling a third of her gold holdings in 2009 is calculated based on the difference between the amount received from the sale and the total investment cost. By selling a portion of her gold holdings at a higher price than she purchased them for, Prema was able to make a profit.
It is essential for investors like Prema to carefully consider market trends and prices when diversifying their investment portfolios. By selling at the right time and price, they can maximize their profits and achieve their investment goals.
Understanding the concept of profit in investment is crucial for making informed financial decisions. By calculating the potential profit from selling assets like gold, investors can assess the effectiveness of their investment strategies and make adjustments as needed.