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? (Remember to round the per-share price to the nearest penny before completing any other computations.)

Answer 1

Number of shares
1050/10=105
After one year share value
10×(1+0.13)=11.3
After the second year share value
11.3×(1−0.05)=10.735
Total
10.735×105=1,127.175

Answer 2

Answer:

$1127.70$$

Step-by-step explanation:

The current price of a unit share is $10$$ and the total amount invested is $1050$$

Total number of shares purchased

$= \frac{1050}{10}\\ = 105$

In the first year, the share increased by 13%, thus the value of a unit share after first year is

$10$$ $+ (13$% of $10$$)

$= 10 + \frac{13}{100} * 10\\= 10 + 1.3\\= 11.3$$

In the second year, the share decreased by 5%, thus the value of a unit share after second year is

$11.3$$ $-(5$% of $11.3$$)

$= 11.3 - \frac{5}{100} * 11.3\\= 10.735$

≈$10.74$$

Thus the total value of shares after 2 years is

$105 * 10.74\\= 1127.70$$