Question

You buy 100 shares of a company stock at $9.75 per share and place the same amount in a savings account earning 4.5% APR. The stock gained 8% in the first year. What is the difference in total value between your stocks and savings account by the end of the first year?

Answer 1

Took test and it's $34.12

Answer 2

Savings account100 shares x $9.75 = $975, then multiplied by 0.045 will result to $43.89.
Stock100 shares x $9.75 = $975, then multiplied by 0.08 will result to $78.00.
So, the difference between your stocks and savings account by end of the year is $34.11 ($78.00 deducted by $43.89).Your stock is gaining higher APR by $34.11 than what's calculated in your savings account.