SAT Mathematics Practice Test 4

Questions 57 and 58 refer to the following information.

The stock price of one share in a certain company is worth

\$360

today. A stock analyst believes that the stock will lose 28 percent of its value each week for the next three weeks. The analyst uses the equation

V=360(r)^t

to model the value, V, of the stock after t weeks.

Question : 58 of 58

Marks: +1, -0

To the nearest dollar, what does the analyst believe the value of the stock will be at the end of three weeks? (Note: Disregard the

\$

sign when gridding your answer.)

Your Answer:

Validate

Solution:

The analyst’s prediction is that the stock will lose 28 percent of its value for each of the next three weeks. Thus, the predicted value of the stock after 1 week is

\$360

- (0.28)

\$360=\$259.20

; after 2 weeks,

\$259.20−(0.28)\$259.20≈\$186.62

;

and after 3 weeks,

\$186.62 − (0.28)\$186.62≈\$134.37

. Therefore, to the nearest dollar, the stock analyst believes the stock will be worth 134 dollars after three weeks.

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