Multiple choice

Lucy invested $\$10,000$ in a new mutual fund account exactly three years ago. The value of the account increased by $10$ percent during the first year,increased by $5$ percent during the second year, and decreased by $10$ percent during the third year. What is the value of the account today?

  1. $\$10,350$
  2. $\$10,395$
  3. $\$10,500$
  4. $\$11,500$
  5. $\$12,705$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Year 1: 10000 * 1.10 = 11000. Year 2: 11000 * 1.05 = 11550. Year 3: 11550 * 0.90 = 10395.

AI explanation

Calculate the value of the account for each year using the percentage changes sequentially. For the first year, the value becomes 10000 * 1.10 = 11000; for the second year, it becomes 11000 * 1.05 = 11550. For the third year, apply the 10 percent decrease to get the final value of 11550 * 0.90 = 10395. The value of the account today is $10,395.