What would Prema's profit have been if she sold everything in 2010?
If Prema sold everything in 2010, her profit would have been $13,764.
Calculating Prema's Profit from Selling Gold
1. Prema's Gold Purchase in 2005:
Prema purchased 18 ounces of gold in 2005 for $409 per ounce. To find the total cost of her gold holdings, we can multiply the number of ounces (18) by the cost per ounce ($409).
Total cost of gold holdings in 2005 = 18 * $409 = $7,362.
2. Selling a Third of Gold Holdings in 2009:
In 2009, Prema sold a third of her gold holdings, which is 6 ounces. She sold these 6 ounces at a price of $887 per ounce.
Amount received for 6 ounces in 2009 = 6 * $887 = $5,322.
3. Selling the Remaining Gold Holdings in 2010:
Prema sold the remaining gold holdings, which is 12 ounces, in 2010 at a price of $1,317 per ounce.
Amount received for 12 ounces in 2010 = 12 * $1,317 = $15,804.
4. Calculating Total Amount Received and Profit:
Total amount received = Amount received for 6 ounces in 2009 + Amount received for 12 ounces in 2010
Total amount received = $5,322 + $15,804 = $21,126.
Profit = Total amount received - Total cost of gold holdings
Profit = $21,126 - $7,362 = $13,764.
In conclusion, if Prema sold everything in 2010, her profit would have been $13,764.