SOLUTION: Two equal amounts of money were invested in two different stocks. The value of the first stock increased by 15% the first year and decreased by 15% the second year. The second stoc
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Question 1114644: Two equal amounts of money were invested in two different stocks. The value of the first stock increased by 15% the first year and decreased by 15% the second year. The second stock decreased by 15% the first year and increased by 15% the second year. What investment was more profitable? Answer by ikleyn(52781) (Show Source):
Let P be the equal amount invested initially in each of the two stocks.
Then the first amount became P*1.15*0.85 = 0.9775*P at the end of the second year.
The second amount became P*0.85*1.15 = 0.9775*P at the end of the second year.
As you see, both investments were equally profitable with the negative profit (= loss) of (100% - 97.75%) = 2.25% at the end of the second year.
