Question

Alexa bought stock in a company two years ago that was worth xx dollars. During the first year that she owned the stock, it decreased by 7%. During the second year the value of the stock decreased by 9%. Write an expression in terms of xx that represents the value of the stock after the two years have passed.

Answer 1

The expression that represents the value of the stock after two years is 0.8463*xx.

Let x be the initial value of the stock xx dollars.

After the first year, the value of the stock decreased by 7%. This means it lost 0.07x dollars.

So, the value of the stock after the first year is x-0.07x = 0.93x dollars.

Then, in the second year, the stock decreased by 9% of the new value 0.93x, which is 0.09*(0.93x) = 0.0837x dollars.

So, the value of the stock after two years is 0.93x - 0.0837x = 0.8463*x dollars.

Therefore, the expression that represents the value of the stock after two years is 0.8463*xx.