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24 February, 08:25

Your Mutual Fund was valued at $237,500. It has lost 6% per year for the last 3 years. What is its value today?

a) $179,263.70

b) $187,721.40

c) $197,263.70

d) $237,500.60

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  1. 24 February, 08:33
    0
    The answer is C) $197,263.70

    Step-by-step explanation:

    It's losing 6% PER year for the last 3 year.

    You can do what I did and take $237,500 and times it 0.06. Which should give you 14,250, that is how much is lost in year one.

    So subtract 14,250 from 237,500, you should have $223,250 now.

    Repeat the first step with $223,250 now, you times it by 0.06 again and you should get 13,395, you subtract that from $223,250.

    You have $209,855 now, once again times that by 0.06 and you get 12,591.30. Subtract 12,591.30 from 209,855 and you should end up with $197,263.70

    It's a long, simple method and I'm sure there is another method of solving this question, but this is an easy way to get the answer.
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