Main content

## 7th grade

### Course: 7th grade > Unit 5

Lesson 6: Rational number word problems- Rational number word problem: school report
- Rational number word problem: cosmetics
- Rational number word problem: cab
- Rational number word problem: ice
- Rational number word problem: computers
- Rational number word problem: stock
- Rational number word problem: checking account
- Rational number word problems

© 2023 Khan AcademyTerms of usePrivacy PolicyCookie Notice

# 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?

- how come sal divided 4,200 by 4,200 and 4,050 and 2,510?(14 votes)
- 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.(14 votes)

- 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.(8 votes)- 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.(7 votes)

- why does the calculator look so real?(3 votes)
- It's just the program he uses. Kinda pointless if you ask me(2 votes)

- why's he using a calculator, he should get a piece of paper or something and do it himself(3 votes)
- 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. :)(4 votes)

- another way of doing it is adding the amounts of shares up and dividing by 1.5 million then just multiplying the answer by 4200.(4 votes)
- how do you know to stop at 0.39 and not multiply it by 0.390334572491?(2 votes)
- You're right, you don't know when to stop. Sal seemed to arbitrarily stop at 0.39. Though, the problem did say the result should be rounded to the penny (2 decimal places), so he many have thought 2 digits were sufficient for intermediate results as well.(4 votes)

- 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)
- 4.200/10.760 = 0.39... What you did was 10.760/4.200 which does give 2.5. Basically you switched the numbers.(7 votes)

- why not just add the three numbers at the bottom(2 votes)
- 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 at3:56of the video.(2 votes)
- I rounded the 0.39 so I just got 585,000. I get that I wasn't supposed to round until the end, but it was confusing in the video because he only wrote down 0.39 and ignored the rest while explaining.(2 votes)

## 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.