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Suppose that you have ​$10 comma 00010,000 in a rather risky investment recommended by your financial advisor. During the first​ year, your investment decreases by 5050​% of its original value. During the second​ year, your investment at the end of year one increases by 6060​%. Your advisor tells you that there must have been a 1010​% overall increase of your original ​$10 comma 00010,000 investment. Is your financial advisor using percentages​ properly? If​ not, what is your actual percent gain or loss of your original ​$10 comma 00010,000 ​investment?

Respuesta :

Answer:

20% loss

Explanation:

At time 0, original investment sum = $10,000

In year 1, loss was 50%.

= $10,000 * (1 - 50%) = 10,000 * 50% = $5,000

In year 2, gain was 60%.

= $5,000 * (1 + 60%) = 5,000 * 1.6 = $8,000.

Therefore, percentage change on original investment

= 8,000/10,000 - 1 = 80% - 1 = -20%.

Thus, percentage loss on original investment = 20%.