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by romitvsingh » Fri Oct 21, 2011 5:40 am
Lucky invested $10,000 in a new mutal fund account exactly three years ago. The value of the account increased by 10% during the 1st year, increased by 5% during the 2nd year, and decreased by 10% during the third year. what is the value of the account today?

A)$10,350
B)$10,395
C)$10,500
D)$11,500
E)$12,705

pls explain in detail
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by Anurag@Gurome » Fri Oct 21, 2011 5:55 am
romitvsingh wrote:Lucky invested $10,000 in a new mutal fund account exactly three years ago. The value of the account increased by 10% during the 1st year, increased by 5% during the 2nd year, and decreased by 10% during the third year. what is the value of the account today?
After the 1st year,
  • Money in the account = $10,000 + 10% of $10,000 = $(10,000 + 1,000) = $11,000
After the 2nd year,
  • Money in the account = $11,000 + 5% of $11,000 = $(11,000 + 550) = $11,550
After the 3rd year,
  • Money in the account = $11,550 - 10% of $11,550 = $(11,550 - 1,155) = $10,395
The correct answer is B.
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by rijul007 » Fri Oct 21, 2011 7:20 am
Value of account after 1st yr = $ 10000 * 110/100
Value of account after 2nd yr = $ 10000 * 11/10 * 105/100
Value of account after 3rd yr = $ 10000 * 11/10 * 105/100 * 90/100
= $ 11 * 105 * 9
= $ 11 * 945
= $ 10395

Option B
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