Suppose that a stock’s price is $48 at the end of Day 1. If the price of the stock increases by 30% during Day 2, 20% during Day 3 and then decreases by 5% during Day 4, what is the total percentage change in the stock price during these 3 days?
Marked as Best Answer
FIRST OFF --> PERCENT CHANGE IS THE NEW PRICE MINUS THE OLD PRICE DIVIDED BY THE OLD PRICE. THE OLD PRICE FROM DAY 1 WAS $48, WE NEED TO FIND OUT THE NEW PRICE.....
DAY 1 48
DAY 2 IS AN INCREASE OF 30%, EASIEST WAY TO DO THAT IS 1.3 X 48 = 62.4
DAY 3 IS AN DECREASE BY 5% ... SO 62.4 (FROM THE DAY BEFORE) X .95 62.4 X .95 = 59.28
SO 59.28 IS OUR NEW PRICE.
% CHANGE IS (NEW-OLD)/OLD OR (59.28 -48)/48 = .235 OR 23.5%
.......
HOW DID I GET THE AMOUNTS FOR EACH DAY?????
TO INCREASE OR DECREASE AN AMOUNT BY A GIVEN PERCENT
TAKE THE AMOUNT THAT YOU HAVE AND TIMES IT BY 1 PLUS THE PERCENT AS A DECIMAL....
SO LETS DO ANOTHER EXAMPLE
A GIRL MAKES $30 AN HOUR, BUT IS GETTING A 10% RAISE.....
SO DO 30 X 1.1 (1.1 BC 10% IS .10...1+.10 IS 1.1) = $33 SINCE SHES GETTING MORE MONEY YOU ADD THE .10
OR
A GIRL BUYS A CAR FOR $2500, AS SOON AS SHE DRIVES IT OFF THE LOT IT LOSES 15% OF ITS VALUE...
SO DO $2500 X .85 (1 - .15) = 2125
HOPE THAT HELPS
