Question

You save $5,000.00 and invest 60% of it in stocks while leaving the rest in a savings account earning a 4.9% APR. The stock increases 9% in the first year and loses 4% of its value the second year. What is the total amount gained during the 2 years?

Answer 1

The amount earned throughout the 2 years would be $5340.002

Answer 2

60% of 5000 is 3000

STOCK:
1 Year 3000 x 1.09 = 3270
2 Year 3270 x -1.04 = 3139.2

INTEREST:
1 Year 2000 x 1.049 = 2098
2 Year 2098 x 1.049 = 2200.802

TOTAL AFTER 2 years:

3139.2 + 2200.802 = 5340.002