Word Problem Help

Question

Remember that percent times the base gives the percentage, a part of the base. To calculate with a percent, change it to decimal form. An acquaintance of one of the authors was about to take his startup internet company public. He owned 5% of the 900,000 shares of stock that were issued when the company was first formed.

The board of directors decided to reward him by issuing additional stock so that he would then own 10% of the company. How many new shares of stock should be issued and then rewarded to him?

Answer 1

Hi Jentre R.,

In decimal form 5% = .05 and 10% = .10.

If he now owns 5% of 900 shares, he owns .05*900 = 45 shares.

If the board wants him to own 10% of the company's 900 shares, he would need to own .10*900 = 90 shares.

He already owns 45, so how many more shares will the board need to issue so he owns 90 shares?

See if you can do the rest.

Let me know, Joe.