Broker P charges a commission of $8.50 for every ten shares of stock, and Broker Q charges a fee of $65.00 for every thousand dollars bought or sold. If stock in Ergar Appliances costs $18.75 per share and you buy 500 shares, which broker is the better deal, and by how much?

Broker P charges $8.50 for each group of 10 shares, so 500 shares cost 50 × $8.50 = $425.00 in fees. The shares cost 500 × $18.75 = $9,375, so Broker Q’s fee is 9.375 × $65 = $609.375, or about $609.38. Broker P is cheaper by $609.38 − $425.00 = $184.38, matching “Broker P will charge $184.38 less than Broker Q.”

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