Question

The price of a stock decreased by 20%. By what percent must the price increase to return to its original value?

A) 25%
B) 50%
C) 20%
D) 120%

Answer 1

The price of the stock must increase by 25% to return to its original value.

Step-by-step explanation:

To return to its original value, the price of the stock must increase by the same percentage that it decreased by. In this case, the stock price decreased by 20%. To calculate the percentage increase needed to return to the original value, we can use the formula:

Percentage increase = (percentage decrease / (100 - percentage decrease)) x 100

Plugging in the values, we get:

Percentage increase = (20 / (100 - 20)) x 100 = 25%

Therefore, the price of the stock must increase by 25% to return to its original value.