Cost per contract = $7 × 100 = $700

Total trade amount = $700 × 5 contracts = $3,500, which means the correct commission rate to use is $35 + 0.7% of the trade amount.

Initial commission costs per contract = $35 + ($700 × 0.7%) = $39.90. Because this is below the $45 maximum charge, $39.90 per contract will be charged.

Total commissions for 5 contracts = $35 + ($3,500 × 0.7%) = $59.50.

Commission per contract = $59.50 / 5 = $11.90, which is between the $3 minimum and $45 maximum per contract.

(Book 3, Module 38.2, LO 38.d)