Answered

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Suppose that you have $13,000 in a rather risky investment recommended by your financial advisor. During the first
year, your investment decreases by 40% of its original value. During the second year, your investment at the end of year
one increases by 50%. Your advisor tells you that there must have been a 10% overall increase of your original $13,000
investment. Is your financial advisor using percentages properly? If not, what is your actual percent gain or loss of your
original $13,000 investment?

Sagot :

Answer:

There is loss of 10%

Step-by-step explanation:

The total sum of money invested [tex]= 13000[/tex] dollars

In the first year, the Investment values  decreases by 40%. The final investment value after one year

[tex]\frac{(100-40)}{100} * 13000\\7800[/tex]

Now in the second year the investment increases by 50%. The final investment value after second year

[tex]\frac{100+50}{100} *7800\\1.5 * 7800\\11700[/tex]

The investment value after second year is less than that of total sum invested

% loss

[tex]\frac{13000-11700}{13000} * 100\\10[/tex]percent

There is loss of 10%

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