Question

A company’s stock price decreased by 16 of its value each month for 3 months. If the original price was $60, what
was the final stock price?
A. $30
C. $40
B. $35
D. $45

Answer 1

To find the final stock price after a decrease of 16% each month for 3 months, we follow these steps:

1. **Calculate the decrease for the first month:**
\[
\text{Decrease} = 60 \times 0.16 = 9.6
\]
\[
\text{New Price} = 60 - 9.6 = 50.4
\]

2. **Calculate the decrease for the second month:**
\[
\text{Decrease} = 50.4 \times 0.16 = 8.064
\]
\[
\text{New Price} = 50.4 - 8.064 = 42.336
\]

3. **Calculate the decrease for the third month:**
\[
\text{Decrease} = 42.336 \times 0.16 = 6.77776
\]
\[
\text{New Price} = 42.336 - 6.77776 \approx 35.55824
\]

After rounding, the final stock price is approximately $35.56.

The closest answer from the options provided is **B. $35.**