Thread: Stock problem

umm... i'm in the 5th grade and i need help on this problem.

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You decide you will buy a stock only if it shows an overall increase over the next 30 days. The first 10 days it has an average daily increase of $0.30. The next 10 days it has an average daily decrease of $0.45. The last 10 days it has an average daily increase of $0.25. Will you buy the stock? Explain.

Originally Posted by alric36

umm... i'm in the 5th grade and i need help on this problem.

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You decide you will buy a stock only if it shows an overall increase over the next 30 days. The first 10 days it has an average daily increase of $0.30. The next 10 days it has an average daily decrease of $0.45. The last 10 days it has an average daily increase of $0.25. Will you buy the stock? Explain.

Let's say the stock started out at price, $X. So, after 10 days, the stock went up by (10 days) times (30 cents a day) = $3.00.

So after 10 days, the stock price is $X+$3.

The next 10 days, the stock decreases by (10 days) times (45 cents a day) = -$4.50.

So the new price of the stock after 20 days is ($X+$3)-$4.50=$X-1.50. So the price is below the starting price.

Last 10 days the stock went up by (10 days) times (25 cents a day) = $2.5.

So the final total is ($X-$1.50)+$2.5=$X+$1

So the stock price went up one dollar over the whole month.