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(12) 20% positive return on your investment, and during year 2, you experience a negative 20%, how much the value of your inv
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Answer #1

Value changed by -4%.

working:

Let the investment be $100.

during the first there was a positive return of 20%.

so the amount of investment by the end of year 1 = $100+20%=>$120.

during the second year there was a negative return of 20%.

so the amount of investment by the end of year 2 = $120-20%

=>$96.

now the actual investment of $100 is reduced to $96

the difference is $96-100=>-$4.

so the percentage change in value of investment = -$4 /$100 original investment *100

=>-4%.

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