document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=908648>Question 908648</A>: <I><SPAN STYLE=\"word-break: break-all;\"> After two consecutive years of 10% losses, what rate of return in the third year will produce a cumulative loss of 30%? (Round your answer to 2 decimal places. Negative answers should be indicated by minus sign.) </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #551274 by </B><A HREF=/tutors/aboutme.mpl?userid=stanbon><B>stanbon(75887)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=stanbon><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/images/nopicture.jpg><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=551274\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> After two consecutive years of 10% losses, what rate of return in the third year will produce a cumulative loss of 30%? (Round your answer to 2 decimal places. Negative answers should be indicated by minus sign.)<BR>\n" );
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document.write( "Start with \"x\" dollars.<BR>\n" );
document.write( "After one year you have 0.9x<BR>\n" );
document.write( "After two years you have 0.9^2x = 0.81x<BR>\n" );
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document.write( "Equation:<BR>\n" );
document.write( "If your interest loss is \"k%\" you have (1-k)% of the 2nd year's balance.<BR>\n" );
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document.write( "0.70x = (1-k)(0.81x)<BR>\n" );
document.write( "1-k = 0.70/0.81 = 0.86<BR>\n" );
document.write( "k = 0.14%<BR>\n" );
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document.write( "Cheers,<BR>\n" );
document.write( "Stan H. </SPAN>\n" );
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