Multiple choice

Michael Bolton has \$90,000 with him. He purchases a car, a laptop and a flat for \$15,000, $13,000 and $35,000 respectively and puts the remaining money in a bank deposit that pays compound interest @15% per annum. After 2 years, he sells off the three items at 80% of their original price and also withdraws his entire money from the bank by closing the account. What is the total change in his asset?

  1. -4.5%

  2. +3.5%

  3. -4.32%

  4. +5.5%
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Initial assets: 90,000. Spent: 15k+13k+35k = 63k. Remaining: 27k. Bank deposit after 2 years: 27000 * (1.15)^2 = 27000 * 1.3225 = 35707.5. Sale of items: 80% of 63k = 50400. Total final assets = 35707.5 + 50400 = 86107.5. Change = 86107.5 - 90000 = -3892.5. Percentage change = (-3892.5 / 90000) * 100 = -4.325%.

AI explanation

After spending 63000 on the items, the remaining 27000 is deposited in the bank, growing to 27000 multiplied by 1.15 squared, which equals 35707.5. The three items are sold at 80 percent of their original 63000 value, totaling 50400, making his total final assets 86107.5. Compared to the initial 90000, this represents a decrease of 3892.5, which is a change of negative 4.32 percent.

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