An investor purchased a share of non-dividend-paying stock for p dollars on Monday. For a certain number of days, the value of the share increased by r percent per day. After this period of constant increase, the value of the share decreased the next day by q dollars and the investor decided to sell the share at the end of that day for v dollars, which was the value of the share at that time. How many working days after the investor bought the share was the share sold, if
Two working days later.
Three working days later.
Four working days later.
Five working days later.
Six working days later.
Okay let d=total no. of days for which the price of the stock increases at r% a day.
Now form the question stem we can make the following equation.
v= p [1 + r/100]^d - q
there fore (v+q)/p = [ 1 + r/100 ]
But form the question stem we have r= 100 [ sqrt [ ( v+q)/p] ]
Therefore (v+q)/p= ( 1+ r/100)^d=( r/100 +1)^2
Therefore d=2. So the trader sold the stock after 2+1= 3 days.