Question

The value of investments in the stock market change daily. Suppose you buy a stock for $1500. It decreases in value by 5% and then rises 7%. What is the new value?

Answer 1

$1,524.75

Explanation:

Purchase price = $1,500

Percentage decrease = 5% or 0.05 as a decimal

Amount by which the stock decreased = - (1500*0.05) = -$75

So at first, the price decrease to = $1,500 - $75 = $1,425

Secondly, the percentage increase in price = 7% or 0.07 as a decimal

Amount by which the stock increased = (1,425*0.07) = $99.75

Therefore, the price rose to = $1,425 + $99.75 = $1,524.75

New value is therefore $1,524.75