An investor is buying more shares of a stock that is currently trading at $124.27 Previously, she bought 150 shares of this stock for $11,269.50 She wants the average purchase price of all the shares to be $108.75 The average purchase price is the total amount spent divided by the total number of shares. Which equation can she use to find the number of shares to buy to achieve her desired average purchase price?
Answer
A
124.27=150 + x11,269.50 + 108.75x
B
108.75=11,269.50 + 124.27x150 + x
C
108.75=150 + x11,269.50 + 124.27x
D
124.27=11,269.50 + 108.75x150 + x
Explanation
The average purchase price is total spending divided by total shares. After buying x more shares, she will have spent $11,269.50 + $124.27x and own 150 + x shares. Setting that ratio equal to her target average gives 108.75 = (11,269.50 + 124.27x)/(150 + x), which is choice B.
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