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Math

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A share of stock loses 5% in value and then gains 5% . How does its ending value compare with its initial value?

  • Math -

    Ending value is slightly lower.

    For example, $100 - 5% = $100 - $5 = $95

    But 5% gain from $95 will not be as much.

  • Math -

    x(.95)(1.05)/x
    = .95(1.05) = .9975

    It will be 99.75% of its initial value

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