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You save $5,000.00 and invest 60% of it in stocks while leaving the rest in a savings account earning a 4.9% APR. The stock increases 9% in the first year and loses 4% of its value the second year. What is the total amount gained during the 2 years? What would the gain have been if all of the investment had been left in the savings account?
anwseris 502.01
To calculate the total amount gained during the two years, we first need to calculate the return on the stock investment.
In the first year, the stock increases by 9%, so the value of the stock investment after the first year would be 60% of $5,000 increased by 9%:
$5,000 * 0.60 * 1.09 = $3,270
In the second year, the stock loses 4% of its value, so the value of the stock investment after the second year would be:
$3,270 * 0.96 = $3,139.20
The total gain from the stock investment over the two years would be:
$3,139.20 - $3,000 = $139.20
Now, let's calculate the total amount gained if all of the investment had been left in the savings account.
The total amount in the savings account after two years would be:
$5,000 - $3,000 = $2,000
The interest earned on the savings account over two years would be:
$2,000 * 0.049 * 2 = $196
Therefore, if all of the investment had been left in the savings account, the gain would have been $196 over the two years.
The total gain during the two years is:
$139.20 + $196 = $335.20
Therefore, the total amount gained during the two years is $335.20.