You invest $100 today in a company. You earn 10% in your first year but lose 10% in the second year. At the end of the second year do you have more, less or the same as you started with?

bobbobs avatar
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You'd have $99. A 10% gain of $100 is $10. So the end of the first year you have $110. Assuming you still have this amount at the beginning of the second year but you lose 10% of your total investment throughout the year, you would lose $11 because 10% of $110 is $11. $110-$11=$99. You'd have less than what you started with the first year.

you have more blue
but you have less red
you have the same amount of yellow though

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I hate this post slightly more than the others cause it isn't anon.

It depends on whether the interest is compounded or not...

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