Question

If a stock valued at $40 per share increases by 20% and then decreases by 25% what is the resulting value of the stock?

Answer 1

The resulting value of the stock is $36.

Explanation:

First, we need to find out what 20% of $40 is.

40 x 0.20 = 8

40 + 2 = $48

Therefore, the stock value, when increased, is $48.

Now, we need to see what 25% of $48 is.

48 x 0.25 = 12

48 - 12 = $36

Therefore, the resulting value of the stock is $36.

Answer 2

$36

Explanation:

The stock value of $40 increased by 20%.

Increased value

= 20% of $40

= (20/100) × $40

= $800/100

= $8

New stock value

= Initial value + increased value

= $40 + $8

= $48

Then, the value decreased by 25%.

Decreased value

= 25% of $48

= (25/100) × $48

= $1200/100

= $12

New stock value

= Initial value + decreased value

= $48 - $12

= $36

So, the resulting stock value is $36.