# Thread: what was the value of the shares at the end of 2007?

1. ## what was the value of the shares at the end of 2007?

a man invests 40,000 in ACME shares at the beginning of 2005.the stocks rose in value by 12% per annum for each of the next 3 years and then started to decrease by 16% per annum.
1)what was the value of the shares at the end of 2007?
2)if the value of the shares continues to decrease at 16% per annum,when will they have dropped to their original 2005 price?

2. ## Re: what was the value of the shares at the end of 2007?

For 1 it's easiest to solve by brute force. The value after three years is given by $40000 \cdot 1.12^3$

The value after n years is $40000 \cdot 1.12^3 \cdot 0.84^n$