Phylisha_s+excellent+comment+and+problems+to+be+discussed+on+March+25

# Phylisha_s+excellent+comment+and+problems+to+be+discussed+on+March+25

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Homework to be discussed in class on Friday, March 25 Please do Chapter 10, page 392, Exercises 1,3,17 and make sure you understand problems 4-9, that were in today’s handout. 4. If the Dow Jones Industrial Average (DJIA) starts the month at 11,000, increases by 5% the first week, then decreases by 5% the second week, what will its value be after two weeks? This is equivalent to what total percentage change over the two week period? Is this surprising? Solution: Increase by 5%: 1.05*11000=11550 or 11000+.05*11000=11000+550=11550 Decrease by 5%: .95*11550=10972.5 or 11550-.05*11550=11550-577.5=10972.5 In one step: 1.05*.95*11000=10972.5 1.05*.95=.9975=99.75% which represents a 1-.9975=.0025 decrease or 100%-99.75%=.25% decrease Check: 11000-.25%*11000=10972.5 5. What would the percentage decrease have to be in the second week so that the DJIA is at 11,000, its starting value at the beginning of the month? Answer; 5. 1.05*x%*11000=11000 x%=.952381=95.2381% So a 4.7619 % decrease will bring the DJIA back down to its starting value! 6.

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## This note was uploaded on 01/20/2012 for the course MATH 103 taught by Professor Berkowitz during the Spring '07 term at Rutgers.

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Phylisha_s+excellent+comment+and+problems+to+be+discussed+on+March+25

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