Tom buys 20 shares of a stock that costs $3 each. He sells 10 of those shares for $4 each. The rest of the shares end up doubling in value. How much profit does he make? Give me reasons, before answering the question
He spends 3 * 20 = $60 on the shares. He sells 10 for 10 * 4 = $40. He sells the other 20 - 10 = 10 for a higher valuation. Their price was 3 * 2 = $6. So he got 10 * 6 = $60 from those. So in total, he got 60 + 40 = $100. So his profit was 100 - 60 = $40. So the final answer is 40.