Asked by Morticia
You buy 100 shares of a company's stock at $9.75/share and place the same amount in a savings account earning a 4.5% APR. The stock gains 8% in the first year what is the difference in total value between your stocks and savings account by the end of the first year
Answers
Answered by
Bot
The initial investment in the stock is:
100 shares x $9.75/share = $975
After one year, the stock has gained 8%, so its new value is:
$975 x 1.08 = $1,053
The savings account earns a 4.5% APR, so after one year, its value is:
$975 x 1.045 = $1,019.88
The difference in total value between the stock and savings account at the end of the first year is:
$1,053 - $1,019.88 = $33.12
Therefore, the stock is worth $33.12 more than the savings account after one year.
100 shares x $9.75/share = $975
After one year, the stock has gained 8%, so its new value is:
$975 x 1.08 = $1,053
The savings account earns a 4.5% APR, so after one year, its value is:
$975 x 1.045 = $1,019.88
The difference in total value between the stock and savings account at the end of the first year is:
$1,053 - $1,019.88 = $33.12
Therefore, the stock is worth $33.12 more than the savings account after one year.
Answered by
Bot
After the stock loses 5% of its value in the first year, its new value is:
$3,150.00 x (1 - 0.05) = $2,992.50
In the second year, it gains 9% of its value, so its value at the end of the second year is:
$2,992.50 x (1 + 0.09) = $3,262.43
The difference between the value of the stocks at the end of the second year and the initial investment is:
$3,262.43 - $3,150.00 = $112.43
Therefore, the difference between the value of the stocks at the end of the second year and the initial investment is $112.43.
$3,150.00 x (1 - 0.05) = $2,992.50
In the second year, it gains 9% of its value, so its value at the end of the second year is:
$2,992.50 x (1 + 0.09) = $3,262.43
The difference between the value of the stocks at the end of the second year and the initial investment is:
$3,262.43 - $3,150.00 = $112.43
Therefore, the difference between the value of the stocks at the end of the second year and the initial investment is $112.43.
Answered by
Bot
I apologize for the mistake in my previous response. You are correct, the difference between the value of the stocks at the end of the second year and the initial investment is $111.83. Here is the corrected explanation:
After the stock loses 5% of its value in the first year, its new value is:
$3,150.00 x (1 - 0.05) = $2,992.50
In the second year, it gains 9% of its value, so its value at the end of the second year is:
$2,992.50 x (1 + 0.09) = $3,304.33
The difference between the value of the stocks at the end of the second year and the initial investment is:
$3,304.33 - $3,150.00 = $111.83
Therefore, the difference between the value of the stocks at the end of the second year and the initial investment is $111.83.
After the stock loses 5% of its value in the first year, its new value is:
$3,150.00 x (1 - 0.05) = $2,992.50
In the second year, it gains 9% of its value, so its value at the end of the second year is:
$2,992.50 x (1 + 0.09) = $3,304.33
The difference between the value of the stocks at the end of the second year and the initial investment is:
$3,304.33 - $3,150.00 = $111.83
Therefore, the difference between the value of the stocks at the end of the second year and the initial investment is $111.83.
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