At first glance, this might seem like a simple problem, but as you think it through, you might find yourself second-guessing your calculations. Many people get confused and arrive at different answers. So, let’s break it down step by step to find the correct solution!
Step-by-Step Breakdown of the Profit Calculation
Let’s analyze each transaction carefully:
First Transaction:
Purchase Price: $800
Selling Price: $1,000
Profit Earned: $1,000 – $800 = $200
Second Transaction:
Purchase Price: $1,100
Selling Price: $1,300
Profit Earned: $1,300 – $1,100 = $200
By adding the profit from both transactions: $200 + $200 = $400
