Question

Suppose a stock drops in value by 60% one week, then increases in value the next week by 75%. Is the value higher or lower than where it started

Answer 1

Lower

Explanation:

Use the number 100 to see how the value changes:

First, calculate the 60% drop:

100(0.4)

= 40

Then, calculate the 75% increase:

40(1.75)

= 70

So, since 70 is smaller than 100, the value is lower than where it started.