SOLUTION: An investment decrease by5% per year for 4 years. By what total percent does it decrease?

SOLUTION: An investment decrease by5% per year for 4 years. By what total percent does it decrease?

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Question 1164966: An investment decrease by5% per year for 4 years. By what total percent does it decrease?
Answer by Boreal(15235) (Show Source): You can put this solution on YOUR website!
this is 0.95^4 and that is 0.8145
That is an 18.55% decrease.
it isn't 20%, because only the first year did it decrease 5% from the original amount. The second year, it decreased 5%, but from a smaller number (0.95).
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