Question

Avery bought stock in a company two years ago that was worth x dollars. During the first year that she owned the stock, it increased by 40%. During the second year the value of the stock decreased by 10%.

Answer 1

Answer:

The value of the stock can be found by: x × 1.26.

Step-by-step explanation:

The value of the stock in year one can be found by multiplying x by 1.4. This will represent a 40% increase in value. The following year, the stock decreases in value by 10%; this is represented by multiplication by 0.9. For example, if the value of the stock was $5:

5 × 1.4 = 7                    (A 40% increase in value)

(5 × 1.4) * 0.90 = 6.3   (A further 10% decrease in value)

Rather than writing out the long version, we can simplfify by multiplying 1.4 by 0.9 to get 1.26 .We can also replace 5 with x to get a more general equation.