Question

A stock with an initial cost of $20 per a share doubled its price per a share every

Answer 1

Option B: $160 is the price per a share after 3 years.

Explanation:

The initial cost per share in a stock is $20

Each year the value of the share is doubled its price.

We need to determine the price per a share after 3 years.

The price per share after one year is given by

1st year = Initial cost × double its price

            $=\ 20\times2$

            $=\ 40$

Thus, the price per a share after 1 year is $40

The price per share after 2 year is given by

2nd year = Initial cost after year 1 × double its price

               $=\ 40\times2$

               $=\ 80$

Thus, the price per a share after 2 years is $80

The price per share after 3 year is given by

3rd year = Initial cost after year 2 × double its price

              $=\ 80\times2$

              $=\ 160$

Thus, the price per a share after 3 years is $160

Hence, Option B is the correct answer.