If you're seeing this message, it means we're having trouble loading external resources on our website.

If you're behind a web filter, please make sure that the domains *.kastatic.org and *.kasandbox.org are unblocked.

Main content

Rational number word problem: stock

Use your knowledge of proportions and fractions to determine shareholders profit in this word problem. Created by Sal Khan.

Want to join the conversation?

  • leaf orange style avatar for user Lori Doran
    how come sal divided 4,200 by 4,200 and 4,050 and 2,510?
    (11 votes)
    Default Khan Academy avatar avatar for user
    • aqualine ultimate style avatar for user Aaron Xia
      Sal did that because you have to divide Mary's shares by the total amount of shares. If you have 4 slices of pizza, you ate 1 of the 1+1+1+1 pieces. If you did not include the slice of pizza you ate (Mary's shares), you would've gotten 1/3. That is why you need to include Mary's shares in the denominator along with the other two.
      (10 votes)
  • blobby green style avatar for user SA
    Why did Sal divide 4200/(4050+250+4200) to get the answer?
    I just don't get it because dividing Mary's shears by everyone get the answer.
    (6 votes)
    Default Khan Academy avatar avatar for user
    • duskpin ultimate style avatar for user Rhea Kaithal :D
      Haha ... Mary's shears? Didn't know she was a gardener now. :D
      Ok, now to answer your question. Sal wanted to simplify the fraction and the only way to do that was to divide. As you know a fraction is basically a stood-up division problem so that's why he divided. Once he simplified it, it was a decimal . The decimal is how much of the shares she owns.
      (3 votes)
  • hopper cool style avatar for user Pooch101
    why does the calculator look so real?
    (2 votes)
    Default Khan Academy avatar avatar for user
  • starky sapling style avatar for user joshua.friddell.b
    why's he using a calculator, he should get a piece of paper or something and do it himself
    (2 votes)
    Default Khan Academy avatar avatar for user
    • duskpin ultimate style avatar for user EKTheAnimus🐺
      he pretty much just did it in front of us. Sal uses the drawing app he uses to show us how to solve the problem, and then he sometimes uses a calculator to check his own work to make sure HE didn't make a mistake and wouldnt have to re-record the video. we are all human, so it is very important to check our work for possible mistakes, but it is also important to know how to solve things on paper. :)
      (1 vote)
  • blobby green style avatar for user alli
    why not just add the three numbers at the bottom
    (1 vote)
    Default Khan Academy avatar avatar for user
  • aqualine ultimate style avatar for user Sarah S.
    I tried to solve this but got a different answer that is similar to Sal's but can anyone explain to me how he got that answer? the answer im looking at is at of the video.
    (1 vote)
    Default Khan Academy avatar avatar for user
  • leaf green style avatar for user Nathan
    When I divide 4,050 + 2,510 + 4,200 Which is 10,760. Divided by 4,200 ( 2.5619047 ) how do I get what Khan's got
    (0 votes)
    Default Khan Academy avatar avatar for user
  • marcimus pink style avatar for user nicole.strom1
    Why did Sal use a calculator? Shouldn't he teach us how to do it with a bare mind and not a machine?
    (1 vote)
    Default Khan Academy avatar avatar for user
  • marcimus pink style avatar for user nicole.strom1
    Why did Sal use a calculator? Shouldn't he teach us how to do it with a bare mind and not a machine?
    (1 vote)
    Default Khan Academy avatar avatar for user
  • blobby green style avatar for user Gloria McQueen
    Not letting me do math questions
    (1 vote)
    Default Khan Academy avatar avatar for user

Video transcript

Shares of stock represent how much of a company a person owns? Puff Incorporated is owned by Peter, Paul, and Mary. Peter owns 4,050 shares, Paul owns 2,510 shares, And Mary owns 42 hundred or 4,200 shares. Suppose the company made a profit this year of $1,500,000. If each shareholder gets a proportion of the total profit that is equal to the proportion of the share they own, how much money does Mary receive? So first, let's think about what fraction or what percentage or what proportion of the total profit should Mary receive? So Mary owns 4,200 shares. And how many total shares are there in the company? Well, the only owners of this company are Peter, Paul, and Mary. So the total number of shares are the sum of Peter, Paul, and Mary's shares. So we know that Peter owns 4,050 shares. We know that Paul owns 2,510. And of course, we know that Mary owns 4,200. So let's figure it. This is the fraction of the profit that Mary should be getting. So let's figure out this with a calculator. So this is going to be 4,200 divided by 4,050 plus 2,510 plus 4,200. And so Mary should get 0.39 of the profit. Or if we talk about it in terms of percentage, it would be 39% of the profit. So this right over here is 0.390. Actually, let me just leave it like that. So this is approximately equal to 0.39. And so if we want to figure out how much profit she gets, she gets this much times the total profit. So Mary gets 0.39, and this is the exact quantity right over here. 0.39 is the approximation, so approximately 0.39. This little squiggly equal sign is how I say approximately. She's going to get 0.39 times the total profit, which is $1,500,000. And so let's go back to our calculator. And so we said approximately 0.39. This is the exact value. I can get that exact value again, at least on this calculator, by saying Second Answer. This literally means the previous answer. So this is literally this number right over here-- 0.390334 whatever. So this is the exact quantity times $1,500,000. One, two, three, there we go. There's $1,500,000. I've got to make sure I have the right number zeroes there. And that gets us $585,50- and we need to round to the nearest penny-- and $0.86. So let me put that someplace where I can see it. So this is going to be equal to $585,501 and, if we round, $0.86. So not bad for one year for Mary. She should be able to live quite well just on her dividends from Puff Incorporated.