Question

You save $5,000.00 and invest 60% of it in stocks while leaving the rest in a savings account earning a 4.9% APR. The stock increases 9% in the first year and loses 4% of its value the second year. What would the gain have been if all of the investment had been left in the savings account?

Answer 1

5,340

Explanation:

Hi there:)

Amount invested in stock

=5000×0.6=3000

Amount invested in a saving account

5000-3000=2000

The stock increases 9% in the first year

3,000×(1+0.09)=3,270

and loses 4% of its value the second year

3,270×(1−0.04)=3,139.2

Amount of a saving account after two years

2,000×(1+0.049)^(2)=2,200.8

the total amount gained during the 2 years

3,139.2+2,200.8=5,340...answer

Hope it helps

Answer 2

you would have made 245 by putting all your money in the savings

Explanation:

because the question is not asking how much the stock would have made you you can disregard that ans so since apercentage is not a whole number 100% equals 1, 50% equals .5 and therfore 4.9% equals .049 then you multipky 5000 by .049 and your answer is how much money you made in one year