Lucy invested Tk. 10,000 in a new mutual fund account exactly three years ago. The value of the account increased by 10 percent by 10 percent during the first year, increased by 5 percent during the second year, and decreased by 10 percent during the third year. What is the value of the account today?
Solution
Correct Answer: Option B
1st year’s increase of 10% can be expressed as 1.10; 2nd year’s increase of 5% percent can be expressed as 1.05 ; 3rd year’s decrease of 10 percent can be expressed as 0.90 . Multiply the original value of the account by each of these yearly changes= 10,000(1.10)(1.05)(0.90) = 10,395
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