Question

A stock decreases in value by 20 percent. By what percent must the stock price increase to reach its former value?

Answer 1

if it decreases by 20% it is now 80% of its former value
solve
\[.8x=1\] for x get
\[x=1.25\] so it has to increase by 25%

Answer 2

ok I understand d everything but what im stuck on is how and why are we dividing the .8 by 1

Answer 3

i was using .8 as 80% and 1 as 100%

Answer 4

here is a trick you can use. since it obviously doesn't matter what the original stock was worth, you can pick a number and compute with that number. a good number to pick is 100
if it starts at $100 and loses 20% of its value, then it goes to $80
now if you want it to come back up to $100 you have to add $20 and $20 is 25% of $80

Answer 5

oh ok I got it now thxx satetillite