In November 2003 Cisco CSCO stock rose from 20 to 2250 per s

In November 2003, Cisco (CSCO) stock rose from $20 to $22.50 per share, and Nokia (NOK) rose from $17 to $18 per share. If you invested a total of $3640 in these stocks at the beginning of November and sold them for $3960 at the end of November, how many shares of each stock did you buy?

Solution

let the number of shares in Cisco be x

let the number of shares in Nokia be y

Beginning of November:

price per each share in Cisco = $20

==> price for x shares = 20x

price per each share in Nokia = $17

==> price for y shares = 17y

Total investement = $3640

==> 20x + 17y = 3640 ------------ (1)

End of November:

price per each share in Cisco = $22.50

==> price for x shares = 22.5x

price per each share in Nokia = $18

==> price for y shares = 18y

Total stocks at end = $3960

==> 22.5x + 18y = 3960 ---------- (2)

solving (1) and (2)

18*(1) - 17*(2)

==> 360x + 306y - (382.5x + 306y) = 65520 - 67320

==> 360x + 306y - 382.5x - 306y = -1800

==> -22.5x = -1800

==> x = 80

Substitute x = 80 in (1)

==> 20(80) + 17y = 3640

==> 17y = 3640 - 1600

==> 17y = 2040

==> y = 120

Hence the number of shares in Cisco = 80

and number of shares in Nokia = 120