Question

Luis bought stock at $64.80. The next day, the price increased $14.70. This new price changed by −6 3/4 % the following day. What was the final stock price, rounded to the nearest cent? Is your answer reasonable? Complete the explanation.

Answer 1

The stock first increased by $14.7 (22.7%) to be $79.50.

Then it fell by 6.75% which is $79.50*0.0675=$5.37 so

the final stock price was $79.50-$5.37=$74.13

The answer is reasonable in the sense that the final price lies between the original price and the high the stock experienced on the second day, which is consistent with the 22.7% increase followed by a (smaller) decrease of 6.75%.