Maximizing Profits: How Many Shares to Buy for the Best Return in 6 Months?

In summary, the conversation discusses a website and the desire to contribute, followed by a question about investing in shares to gain the most profits in 6 months. The response includes a formula to calculate the return on investment for two different shares and suggests choosing the one with the largest ROI.
  • #1
rani0712
1
0
Hey guys

I just came across this website i think its awsome..!

Hope i can contribute tooo!

I had a question:

If a Share costs 3 dollars, and it doubles every 3 months
And nother share costs 1 dollar and doubles in One month

How many shares of each would you buy with 1000 dollars, to gain the most profits in 6 months>?
 
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  • #2
If you invest x dollars in the first, it would be worth [itex](x/3)2^{n/4}[/itex] dollars in n years. If you invest x dollars in the second it would be worth [itex]x(2^{n/12}}[itex].
The ratio of those is
[tex]\frac{1}{3}2^{n/4-n/12}= \frac{1}{3}2^{n/6}[/tex]
For N= 6, that ratio is 2/3< 1. What does that tell you?
 
  • #3
Latex Image generator doesn't appear to be working so:

The first gives an annual ROI of:
(3*212/3)/3

The second gives an annual ROI of:
(1*212/1)/1

You want the maxmimum amount of shares of the one that gives the largest ROI for 6months.
 

What is the profit maximization equation?

The profit maximization equation is a mathematical formula used by businesses to determine the optimal level of output that will result in the highest possible profit. It takes into account the costs of production and the revenue generated from selling goods or services.

How is the profit maximization equation calculated?

The profit maximization equation is calculated by finding the point where marginal revenue (MR) equals marginal cost (MC). This is known as the MR=MC rule. This point represents the optimal level of output that will result in the highest profit.

Why is profit maximization important for businesses?

Profit maximization is important for businesses because it helps them to make decisions about how much to produce and sell in order to maximize their profits. This can lead to increased revenue, growth, and financial stability for the business.

What factors can affect the profit maximization equation?

There are several factors that can affect the profit maximization equation, including changes in production costs, changes in market demand, and changes in competition. These factors can impact the optimal level of output and therefore, the level of profit that can be achieved.

Are there any limitations to the profit maximization equation?

Yes, there are some limitations to the profit maximization equation. It assumes that the only goal of a business is to maximize profits, and does not take into account other important factors such as ethical considerations, social responsibility, and long-term sustainability. It also assumes that the market is perfectly competitive, which may not always be the case in real world situations.

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