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Question

Jake invests $1,000 in stocks. In the 1st month, the invested amount grows by 5% and in the 2nd month, the amount after the 1st month decreases by 4%. What will Jake's investment amount to at the end of the 2 months?


A
$960
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B
$1,010
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C
$1,008
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D
$990
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Solution

The correct option is C $1,008
Month 1: Jake's investment grows by 5%.

$1,000+$1,000×5100 =$1,000+$50 =$1,050

Month 2: Jake's investment decreases by 4% from its value at the end of month 1.

$1,050$1,050×4100 =$1,050$42 =$1,008

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