Math Problem Statement

An investor has an account with stock from two different companies. Last year, his stock in Company A was worth $2220 and his stock in Company B was worth $7420. The stock in Company A has increased 20% since last year and the stock in Company B has increased 5%. What was the total percentage increase in the investor's stock account? Round your answer to the nearest tenth (if necessary).

Solution

To solve the problem, we need to find the total percentage increase in the investor's stock account after the increases in both companies' stock values.

Given:

  • Company A's stock was worth $2220 last year and increased by 20%.
  • Company B's stock was worth $7420 last year and increased by 5%.

Steps:

  1. Find the increase in Company A's stock:

    • Percentage increase = 20% of $2220
    • Increase in Company A = 20100×2220=444\frac{20}{100} \times 2220 = 444
    • New value of Company A stock = 2220+444=26642220 + 444 = 2664
  2. Find the increase in Company B's stock:

    • Percentage increase = 5% of $7420
    • Increase in Company B = 5100×7420=371\frac{5}{100} \times 7420 = 371
    • New value of Company B stock = 7420+371=77917420 + 371 = 7791
  3. Find the total value of the stock account after the increases:

    • Total value now = 2664+7791=104552664 + 7791 = 10455
  4. Find the total percentage increase in the account:

    • Original total value = 2220+7420=96402220 + 7420 = 9640
    • Total increase = 104559640=81510455 - 9640 = 815
    • Total percentage increase = 8159640×100=8.5%\frac{815}{9640} \times 100 = 8.5\%

Final Answer:

The total percentage increase in the investor's stock account is 8.5%.

Would you like further clarification on any of these steps or more examples?

Here are some related questions to explore further:

  1. How do you calculate the percentage change when the increase or decrease is a decimal value?
  2. What would happen to the total percentage increase if the increase rates for both companies were higher?
  3. How can we calculate the percentage decrease in a similar situation?
  4. How would you approach solving a percentage change problem with multiple investments in different areas?
  5. What’s the significance of rounding percentages in financial calculations?

Tip: Always check whether you need to round the final answer to the nearest tenth or hundredth for precision, especially in financial contexts!

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Math Problem Analysis

Mathematical Concepts

Percentage Change
Percentage Increase
Basic Arithmetic

Formulas

Percentage increase = (New Value - Old Value) / Old Value * 100

Theorems

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Suitable Grade Level

Grades 7-8