jmc

Question

Bill buys a stock that decreases by 20% on the first day, and then on the second day the stock increases by 30% of its value at the end of the first day. What was the overall percent increase in Bill's stock over the two days?

Accepted Answer

Let the original value of the stock be x. At the end of the first day, the stock has fallen to .8x. On the second day, the stock rises to 1.3(.8x)=1.04x. Thus, the stock has increased 4 percent from its original price over the two days.