SOLUTION: Suppose that you have $10,000 in a rather risky investment recommended by your financial adviser. During the first year, your investment decreases by 30% of its original value. Dur

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Question 1152493: Suppose that you have $10,000 in a rather risky investment recommended by your financial adviser. During the first year, your investment decreases by 30% of its original value. During the 2nd year, your investment increases by 40% of its first year value. Your adviser tells you that there must have been a 10% overall increase of your original $10,000 investment. Is your financial adviser using percentages properly? If not, what is your actual percent gain or loss of your original $10000 investment?
Please show steps to solve.
Thank you
Found 2 solutions by josmiceli, MathTherapy:
Answer by josmiceli(19441)   (Show Source): You can put this solution on YOUR website!
After the 1st year:


$7,000 remaining in the investment
---------------------------------------
After the 2nd year:


$9,800 remaining after 2nd year
---------------------------------------

the % loss is:

2% loss

Answer by MathTherapy(10557)   (Show Source): You can put this solution on YOUR website!

Suppose that you have $10,000 in a rather risky investment recommended by your financial adviser. During the first year, your investment decreases by 30% of its original value. During the 2nd year, your investment increases by 40% of its first year value. Your adviser tells you that there must have been a 10% overall increase of your original $10,000 investment. Is your financial adviser using percentages properly? If not, what is your actual percent gain or loss of your original $10000 investment?
Please show steps to solve.
Thank you
(1 - .3)(1 + .4) = .7(1.4) = .98.

So, its value  

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