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 incr
eases 9% in the first year and loses 4% of its value the second year. What is the total amount gained during the 2 years? What would the gain have been if all of the investment had been left in the savings account?
Amount invested in stocks 5,000×0.60 =3,000 after one year gains 9% 3,000×(1+0.09) =3,270 After second year loses 4% 3,270×(1−0.04) =3,139.2 amount after second year So Stocks gained 139.2 (3139.2-3000)
Amount of saving account 5,000×0.40 =2,000 After 2 years 2,000×(1+0.049)^(2) =2,200.802 So it gained 200.802 (2200.802-2000)
Total amount after 2 years 3,139.2+2,200.802 =5,340.002 Gained 340.002 (5340.002-5000)
