First, let's calculate how much money was invested in stocks and how much was left in the savings account:
Amount invested in stocks = $5,000 x 60% = $3,000
Amount left in savings account = $5,000 - $3,000 = $2,000
In the first year, the stock increases by 9%, so the value of the stock investment after the first year is:
$3,000 + ($3,000 x 9%) = $3,000 + $270 = $3,270
In the second year, the stock loses 4% of its value, so the final value of the stock investment after the second year is:
$3,270 - ($3,270 x 4%) = $3,270 - $130.80 = $3,139.20
Now, let's calculate the total amount gained from the stock investment over the 2 years:
Total gain from stocks = $3,139.20 - $3,000 = $139.20
Next, let's calculate the total amount gained if the entire $5,000 had been left in the savings account at an APR of 4.9% for 2 years:
Total amount gained from savings account = $5,000 x 4.9% x 2 = $5000 x 0.049 x 2 = $490
Therefore, the total amount gained during the 2 years from the investment in stocks and the savings account is $139.20 + $490 = $629.20.
You save $5,000.00 and invest 60% of it in stocks while leaving the rest in a savings account earning a 4.9% APR. The stock increases 9% in the first year and loses 4% of its value in the second year. What is the total amount gained during the 2 years? What would the gain have been if all of the investment had been left in the savings account?
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