Question

# You buy 50 shares of stock for $18.25 per share. One month later, the value of the stock is$18.98 per share. a. The value of the stock continues to i

Factors and multiples
You buy 50 shares of stock for $18.25 per share. One month later, the value of the stock is$18.98 per share.
a. The value of the stock increased by $18.98−$18.25=$0.73. If the stock continues to increase$0.73 each month for the rest of the year, which is 11 months, then the value of the stock will increase by $0.73⋅11=$8.03. The value of the stock at the end of the year will then be worth $18.25+$8.03=$26.28. b. The value of the stock increased by (18.98−18.25)/18.25=0.73/18.25=0.04=4%. The value of the stock after each month is then 104% of the value the previous month. At the end of the year, the value will have increased by 4% eleven times. The value of the stock at the end of the year will then be 18.25(1.04)^11≈$28.10.