Your client bought 500 shares of SPEC corp stock on margin at $100 per share with Reg T at 50%. If SPEC is now trading at $120 per share, what is your client's equity?

Explanations

First, let's figure out the debit balance. LMV - DR = EQ. The client bought $50,000 worth of equities with Reg T at 50%. So, we know that she had to deposit $25,000. That is the original EQ. The LMV is 500 shares x $100 per share (LMV = $50,000). We now can say that initially, $50,000 - DR = $25,000. The DR is $25,000. Now, the stock went to $120 per share. so, LMV is now 500 shares x $120 per share = $60,000. $60,000 - $25,000 = EQ. The EQ is now $35,000