Question

The current value of an investment is 125 percent of its initial value.The increase in value is $10million.What was the initial value of the investment

Answer 1

$40 million

Explanation:

According to the scenario, computation of the given data are as follows,

Current value = 125%

which means that current value is 25% more than its initial value.

Let Initial Value = X

So, Increase in investment value = 25% × X = 0.25X

Given, increase value = $10million

So, 0.25X = $10 million

= X = $10million

= X = $10million ÷ 0.25

= X = $40 million

Hence the initial value of investment is $40million.