Question

It is theorized that the price per share of a stock is inversely proportional to the prime​ (interest) rate. In January​ 2010, the price per share of a certain​ company's stock was ​$193.04 and the prime rate was 2.75​%. The prime rate rose to 5.50​% in March 2010. What was the price per share in March 2010 if the assumption of inverse proportionality is​ correct?

Answer 1

Answer:

price per share in March is $96

Explanation:

given data

January price per share = ​$193.04

January prime rate = 2.75%

march prime rate = 5.50​%

to find out

What was the price per share in March

solution

we know that here price is proportional to prime rate

Price ∝ $\frac{1}{rate}$   ........1

so price = k ×  $\frac{1}{rate}$      ...............2

k is constant here

so put all value for january

193.04 = k ×  $\frac{1}{2.74%}$

k = 5.28

so for  march price per share will be by equation 2

price = 5.28 ×  $\frac{1}{5.50%}$

price = 96

so  price per share in March is $96