Question

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

Answer 1

Answer:

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.