Question of the Week

You invest $1,000 in a mutual fund for two years. The mutual fund earned 25% in the first year and lost 10% in the second year. How much is your mutual fund worth at the end of the second year?

a) $1,150
b) $1,375
c) $1,125
d) $1,250

Answer: The correct answer is c).

If you invest $1,000 and earn 25% you will now have $1,250 at the end of the first year ($1,000 times (1+0.25)=$1,250). Now you have $1,250 and earn –10% in the second year, so you are now left with $1,125 at the end of the second year ($1,250 times (1-.10)=$1,125).

Financial Professionals
  1. the general ledger is the record of a company's entire financial transaction history.
    Investing

    What's a General Ledger?

  2. Several things factor into the salary of a financial advisor. Here's a look.
    Investing Basics

    How Much Does A Financial Advisor Earn?

  3. These 5 strategies offer financial advisors a blueprint on how to grow their practices.
    Professionals

    Growth Strategies For Financial Advisors

  4. If you're considering investing in China and want to know when to buy, sell, hold or stay away, consider these economic indicators.
    Economics

    Eyeing China? Consider These Economic Indicators

  5. Whether you're a saver or a financial advisor who want to give their clients a leg up, these 8 tips are essential for financial planning.
    Investing Basics

    8 Essential Tips For Retirement Saving