Question

If you invested $100 right now and earned a 10 percent return in your first year and then lost 10 percent in year 2, how much money would you have at the end of year 2

Answer 1

At the end of the second year, you would have $99. In the first year, you gain 10% which brings you up to $110. Then, you lose 10% of your $110, which is $11. You can subtract 11 from 110 giving you $99.