Question

Shyam invested money in the stock market. In the first year, his stock increased 20%. He paid his stock broker $300 and then lost $450. He withdrew $500, and then his remaining investment doubled. Shyam’s investment is now worth $7100. How much was Shyam’s original investment?

Answer 1

Shyam's original investment was $4000.

Explanation:

Suppose, Shyam's original investment was
`x` dollar.

In the first year, his stock increased 20%. So, the value of the stock will be:
`(x+0.20x)=1.20x` dollar.

He paid his stock broker $300 and then lost $450. So now, the value of the stock will be:
`(1.20x-300-450)=(1.20x-750)` dollar.

He then withdrew $500, so the value of the remaining investment
`=(1.20x-750-500)=(1.20x-1250)` dollar and this remaining investment doubled now.

So, the value of the investment now
`=2(1.20x-1250)` dollar, which is given as $7100.

Thus, the equation will be.......

`2(1.20x-1250)=7100\\ \\ 2.40x-2500=7100\\ \\ 2.40x=7100+2500=9600\\ \\ x=(9600)/(2.40)=4000`

So, Shyam's original investment was $4000.