SOLUTION: which is better: having a stock that goes up 30% on monday then drops 30% on tuesday , or a stock that drops 30% on monday and goes up 30% on Tuesday? In each case, what is the net

Question 1053113: which is better: having a stock that goes up 30% on monday then drops 30% on tuesday , or a stock that drops 30% on monday and goes up 30% on Tuesday? In each case, what is the net percent gain or loss?
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
if it goes up 30%, it's multiplied by 1.3.

this is because x + .3 * x is equal to 1.3 * x.

if it goes down 30%, it's multiplied by .7.

this is because x - .3 * x is equal to .7 * x.

so if you increase it by 30% and then drop it by 30%, you are multiplying it by 1.3 and then multiplying it by .7.

and if you drop it by 30% and then increase it by 30%, you are multiplying it by .7 and then multiplying it by 1.3

since x * 1.3 * .7 is the same as x * .7 * 1.3, you wind up with the same value either way.

assume the original value is 500.

increase it by 30% and it becomes 650.

decrease 650 by 30% and it becomes 455.

assume the original value is 500 again.

decrease it by 30% and it becomes 350.

increase 350 by 30% and it becomes 455.

you wind up with the same value of 455 either way.

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