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Question

In 2005 Tycoon Tammy invested 100 dollars for two years. During the first year her investment suffered a 15% loss, but during the second year the remaining investment showed a 20% gain. Over the two-year period, what was the change in Tammy's investment?

Accepted Answer

After the 15 % loss, Tammy has 100 0.85 = 85 dollars. After the 20 % gain, she has 85 1.2 = 102 dollars. This is an increase in 2 dollars from her original 100 dollars, a 2% gain.