You invest $5,175.00 in a stock plan it increases 9% the first year and then loses 5% of its value the second year. What is your gain compared to your original investment
183.71
After the first year, the investment will be worth $5,175.00 + 0.09($5,175.00) = $5,646.75.
After the second year, the investment will be worth $5,646.75 - 0.05($5,646.75) = $5,363.41.
The gain compared to the original investment is $5,363.41 - $5,175.00 = $188.41.
Therefore, the gain compared to the original investment is $188.41.
I apologize for the mistake in my previous response. After the second year, the investment will be worth $5,646.75 - 0.05($5,646.75) = $5,364.41. The gain compared to the original investment is $5,364.41 - $5,175.00 = $189.41. Therefore, the gain compared to the original investment is $189.41.
final amount = 5175(1.09)(.95)
= 5358.71
gain = 5358.71 - 5175 = 183.71 as Morticia pointed out to you,
not 189.41, which you got as your second wrong answer
I apologize for the mistakes in my previous responses. You are correct that the final amount after two years is $5,358.71, and the gain compared to the original investment is $183.71. Thank you for correcting me.
To calculate the gain compared to the original investment, we need to determine the final value of the investment after two years. Here's how you can calculate it step-by-step:
1. Start with the initial investment: $5,175.00.
2. Calculate the gain in the first year: Multiply the initial investment by the 9% increase (expressed as a decimal).
Gain in the first year = $5,175.00 * 0.09 = $465.75.
3. Determine the value after the first year: Add the gain from the first year to the initial investment.
Value after the first year = $5,175.00 + $465.75 = $5,640.75.
4. Calculate the loss in the second year: Multiply the value after the first year by the 5% decrease (expressed as a decimal).
Loss in the second year = $5,640.75 * 0.05 = $282.04.
5. Determine the final value after the two years: Subtract the loss from the value after the first year.
Final value = Value after the first year - Loss in the second year
= $5,640.75 - $282.04 = $5,358.71.
6. Calculate the gain or loss compared to the original investment: Subtract the initial investment from the final value.
Gain Compared to Original Investment = Final value - Initial investment
= $5,358.71 - $5,175.00
= $183.71.
Therefore, the gain compared to your original investment of $5,175.00 is $183.71.