First, calculate the total cost of the 100 shares of stock:
100 shares * $9.75/share = $975
After the stock gains 8% in the first year, the value of the stock will be:
$975 + $975*8% = $975 + $78 = $1053
Next, calculate the interest earned on the savings account after one year:
$975 * 4.5% = $43.88
So, the total value of the savings account after one year will be:
$975 + $43.88 = $1018.88
The difference in total value between the stocks and savings account after one year is:
$1053 (stock value) - $1018.88 (savings account value) = $34.12
Therefore, the difference in total value between your stocks and savings account by the end of the first year is $34.12.
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? Round to the nearest penny.
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