Let p=price she paid on monday the value on tues =1.05*p, the value on wed is .95*1.05*p . you were told that she sold them for 59.85 so we have p=59.85/(.95*1.05)=60.00.
If you are not careful you might be tempted to say since the price went up 5% and the down 5% there would be no change but remember (1+x)(1-x)=1-x2 and not 1.
Jim
Jim S.
tutor
The equation is p=59.85/(.95*1.05) which is the value of the stock on monday.
day value
mon p
tues 1.05*p
wed .95*1.05*p
thurs 59.85
So .95*1.05*p=59.85 solve for p, the price on Monday.....does this help?
Jim
Report
09/05/15
Jim S.
tutor
Think off it this way
Day value
mon p
tues 1.05*p
wed .95*1.05*p
thurs 59.85
So .95*1.05p=59.85 this is the equation. Solve for p to find the value on Mon.
Jim
Report
09/05/15
Jim S.
tutor
Think of it this way
Day value
mon p
tues 1.05*p
wed .95*1.05*p
thurs 59.85
so .95*1.05*p=59.85 is the equation. Solve for p. Does this help?
Report
09/05/15
Jim S.
tutor
Report
09/05/15
Jim S.
tutor
Edwin, Think of it this way and the equation will result.
Day closing price
mon p she bought here
tues 1.05*p closed up 5%
wed .95*1.05*p closed down 5%
thurs 59.85 she sold here at the open so wed's closing price must be equal to 59.85
So .95*1.05*p=59.85 or .9975*p=59.85 If you solve this equation for p that will be how much she paid on Mon.
Make sense??
Report
09/06/15
Edwin C.
Yes thank you
Report
09/06/15
Edwin C.
09/05/15