how is the answer £300 loss. i have tried to understand it but i still have no idea! does anyone have a method to find the answer to these types of questions?
here's the question:
The price of a particular share varies from day to day. On Monday the price of the share was £1. Tuesday’s price was 20% higher than Monday’s, and Thursday’s price was 25% up on Wednesday’s price. By the Friday of that week the price had returned to £1.
Helen bought £1 000 worth of this share on Monday and then sold them on Thursday to make a profit of £350.
Paul bought £3000 worth of this share on Tuesday, but had to sell them the following day.
Assuming that there are negligible costs associated with buying and selling these shares, what was the return on Paul’s investment?
bmat question stuck need help Watch
- Thread Starter
You need to use the 1000 value to figure out the percentage change from Tuesday to Wednesday. So firstly multiply 1000 by 1.20 and you will get 1200. Multiply this again by 1.25 and you will get 1500. But you know that the profit is 350 and not 500. So do 1500x = 1350 and solve to get a value for x. Multiply this value of x by 3000 and you will get 2700. Therfore he lost 300.