Question

Two years ago, Jose bought $750 worth of stock in a cell phone company. Since then the value of his stock has been DECREASING at an average rate of 5 1/4 % per year. How much is the stock worth now?

Answer 1

$671.25

Explanation:

To get the amount by which the stock have reduced after 2 years, we will use the interest formula;

Interest = Principal * rate * time/100

Interest = 750*5 1/4 * 2/100

Interest = 750*21*2/400

Interest = $78.75

This means that the value of the stock has reduced by $78.75 after 2 years;

Amount that the stock worth now = $750 - $78.75

Amount that the stock worth now = $671.25