Question

You invest $2,500.00 in a stock plan, buying $125 shares. If each share increases in value by 10%, how much is each share worth?

Answer 1

To find out how much each share is worth after a 10% increase, you first need to determine the value of each share initially.

You invested $2,500 in total and bought 125 shares. To find the initial value of each share, you can calculate it as follows:

\[
\text{Initial value per share} = \frac{\text{Total investment}}{\text{Number of shares}} = \frac{2500}{125} = 20
\]

So, each share is initially worth $20.

Next, you need to calculate the new value of each share after a 10% increase:

\[
\text{Increase} = \text{Initial value per share} \times 0.10 = 20 \times 0.10 = 2
\]

Now, add the increase to the initial value to find the new value:

\[
\text{New value per share} = \text{Initial value per share} + \text{Increase} = 20 + 2 = 22
\]

Thus, after the 10% increase, each share is worth **$22.00**.