Question

WILL GIVE MEDAL AND FAN! you invest $5,175.00 in a stock plan. it increases 9% the first year and then loses 5% of it's value the second year. what is your gain compared to your original investment?

Answer 1

5,175 + 9% = 5640.75

5640.75 - 5% = 5302.305

Original investment = 5,175
Gain = 5,302.305

Subtract them both and get = 127.305

Answer 2

$183.7125

Explanation:

Given,

Original investment, A = $ 5,175.00

In first year,

The total investment = $ 5,175.00

The amount is increased by 9 %,

Thus, the final amount at the end of first year,

`A_1=5,175(1+(9)/(100))^1`

`=5175(1+0.09)`

`=5175(1.09)`

`=\$ 5640.75`

In Second year,

The total investment = $ 5640.75,

The amount is decreased by 5 %,

Thus, the final amount at the end of second year,

`A_2=5640.75(1-(5)/(100))^1`

`=5640.75(1-0.05)`

`=5640.75(0.95)`

`=\$ 5358.7125`

Hence,

`\text{Total Gain}=A_2-A`

`=5358.7125-5175`

`=\$183.7125`