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You currently have $10,000 in your 401k plan. Your plan experiences a 20% GAIN the first year followed by a 20% LOSS in the second year. What is the value of your 401k plan at the end of 2 years

Sagot :

Ogorwyneidn

Answer:

9600

Explanation:

when we talk about a 20% gain, it means that the value of the fund had to rise to

1 + 20%

= 1 + 0.20

= 1.20

when we talk about a 20% loss, it also ,means that there was a 1 - 20% drop

1 - 0.20

= 0.80

therefore the value of your 401k plan at the end of the second year would be gotten by:

10000 x 1.20 x 0.80

= 9600

thank you

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