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26 Jul 2022, 13:30
Kudos
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B
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Difficulty:
5%
(low)
Question Stats:
94% (00:47) correct
6%
(01:06)
wrong
based on 32
sessions
History
Date
Time
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Not Attempted Yet
During the first month after Johanna purchased stock in Amalgamedia Inc., the value of her shares fell by 20 percent. During the following month, however, Amalgamedia’s stock price rose by 40 percent. By what percent did Johanna’s shares of Amalgamedia change over those two months?
A. 4%
B. 12%
C. 20%
D. 50%
E. 68%
A. 4%
B. 12%
C. 20%
D. 50%
E. 68%
26 Jul 2022, 18:50
Kudos
Bookmarks
Bunuel
Suppose the value of her shares when she purchased them was x. After the 20% decrease, the value of her shares became 0.8x. After the 40% increase, the value of her shares became 1.4 * 0.8x = 1.12x. We see that Johanna's shares increased by 1.12x - x = 0.12x, which is an increase of 0.12x/x = 0.12 = 12%.
Alternate Solution:
Suppose Johanna purchased the shares for $100. After the decrease of 20%, her shares were worth 0.8 * 100 = $80. After the increase of 40%, her shares were worth 1.4 * 80 = $112. We see that over the two months, the value of her shares increased from $100 to $112, which is a 12% increase.
Answer: B
