financial aid

Question

Bob Forrester is retired and owns a home. Two years ago, Bob's net worth was $650,000. Last year, his net worth was $740,500. What is the approximate percent of increase or decrease between two years ago and last year?

Answer 1

Mikey,

 

Here's how I solved this problem:

 

To find the different in his net worth we first subtract 650,000 from 745,000 and we get 95,000. This means that his net worth increased 95,000. To find the percentage of increase we can look at it two ways, either the percentage of it's value two years ago or the percentage of it's value last year.

 

To find the percentage of it's value from two years ago, we would take 650,000 and divide it by 95,000. The answer is 6.84210526, which would be the percentage of increase. 

 

To find the percentage of it's value from last year, we would take 745,000 and divide it by 95,000. The answer is 7.84210526, which would be the percentage of increase.

 

The difference between these two is 1, so there is a 1% difference. 

 

Written out:

745,000 - 650,000 = 95,000

 

650,000 / 95,000 = 6.84210526

 

745,000 / 95,000 = 7.84210526