Suppose that Christina purchased a stock for x dollars. During the first year, the stock's price rose 15%? (a) Write an algebraic expression for the price of the stock after the first year in terms of x. ?

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Answer 1 · 2017-04-14T04:22:43

a)#S_1=1.15x#
b)#S_2=1.10(1.15x)#
c)#S_2=1.256x#
d)#S_2=$25.30#

The value of the stock #S# is #x#, so: #S=$x#

After #1# year the stock gains #15%# in value:

Then: #S_1=1.15x# because it is now #115%# of the original value.

After #2# years the stock gains #10%# in value:

Then: #S_2=1.10(1.15x)# because it is now #110%# of the #S1# value.

So: #S_2=1.10(1.15x)=1.265x#

After #2# years the stock is now valued at #126.5%# of the original value.

If the original value is $20:

After #2# years the stock is valued at:

#S_2=1.256x=1.265($20)=$25.30#