Question

You invest $5,175.00 in a stock plan. It increases 9% the first year and then losses 5% of its value the second year. What is your gain compared to you original investment?

Answer 1

$183.7

Explanation:

We know that $5,175.00 was invested in a stock plan.

It increased by 9% in the first year:

`9% * 5175.00 = 465.75`

So value reached to (5175 + 465.75 = ) $5640.75

Then it second year, it lost 5% of its value:

`95% * 5640.75 = $5358.7`

Therefore, the gain compared to the initial original investment will be:

$5358.7 - $5175.0 = $183.7

Answer 2

Answer: $183.71

Explanation:

Original amount is $5,175.00

1st year: Increase of 9%

→ $5175(1 + 0.09)

= $5175(1.09)

= $5640.75

2nd year: Decrease of 5%

→ $5640.75(1 - 0.05)

= $5640.75(0.95)

= $5358.71

Gain: 2nd year - Original

→ $5358.71 - $5175.00

= $183.71