Question

You invest $1,050.00, buying stock in a company at $10.00/share. The shares increase in value by 13% the first year and decrease by 5% the second year. How much is the total value of your stocks in the second year?

Answer 1

ok lets determine how many stocks we have purchased
so we have $1050 and each stock costs 10 so how many stocks did we purchase?

Answer 2

1050 diveded by 10= 105 stocks?

Answer 3

Correct ok so he purchased 105 stocks

Answer 4

Now the stock started off selling at $10
And then after the first year increased by 13%
Ok imma try to show you what i was doing earlier
Ok so when it increases by 13% the stock equals:
10+10*.13=10(1+.13)=10(1.13)
SO after the second year a single stock is worth 10*1.13=?

Answer 5

11.3

Answer 6

how do you decrease by 5%?

Answer 7

Ok good
Then the next year it Decreases by 5%
so the stock is equal to:
11.30-(11.30*.05)=11.30(1-.05)=11.30*.95=?
Notice that when we increase we add and when we decrease we subtract
This should make sense intuitively since we are decreasing by a certain percentage that mean we are removing .. subtracting

Answer 8

im confused on your numbers in that equation. so 11.30-(11.30*.05)= 10735

Answer 9

10.735

Answer 10

yes that is correct
Also i wanna try to explain it one more time ... so you understand what I did
11.30-(11.30*.05)

Now lets factor out the 11.30
11.30(1-.05)

Now lets solve within the bracket
11.30(.95)

Now solve
11.30(.95)=10.735

Answer 11

ok now we have 105 stocks
and each stock is worth 10.735
SOoooo how much is our total value of stock?

Answer 12

105*10.735=1,610.25

Answer 13

yup :) Voila

Answer 14

thanks again!

Answer 15

np