Question

5) A certain stock opens with a price of $0.59. Over the first three days the stock value increases at an average rate of 50% per day. If this trend continues, how much will the stock be worth in 12 days?

Answer 1

To find the future value of a stock that increases at 50% per day from an initial price of $0.59 for 12 days, apply the exponential growth formula to get an approximate value of $76.45.

Step-by-step explanation:

To calculate the future value of a stock increasing at an average rate of 50% per day from an initial price of $0.59, we can use the formula for exponential growth: Future Value = Present Value * (1 + Growth Rate)^Number of Periods.

In this case, the Present Value is $0.59, the Growth Rate is 50% per day, and the Number of Periods is 12 days. Therefore, the calculation would be:

Future Value = $0.59 * (1 + 0.50)^12

When we calculate the above expression, we obtain:

Future Value = $0.59 * (1.50)^12

Future Value = $0.59 * 129.746338

Future Value ≈ $76.45

So, if the stock continues to grow at this rate, after 12 days, it would be worth approximately $76.45.

Answer 2

In 12 days the stock will be worth $ 76.55.

Step-by-step explanation:

Given that a certain stock opens with a price of $ 0.59, and over the first three days the stock value increases at an average rate of 50% per day, to determine, if this trend continues, how much will the stock be worth in 12 days the following calculation must be performed:

Initial value x rate of increase ^ number of years = X

0.59 x 1.5 ^ 12 = X

0.59 x 129.74 = X

76.55 = X

Therefore, in 12 days the stock will be worth $ 76.55.