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I want to confirm that my reasoning is correct for this problem.

A company's initial stock price on the day of its IPO (Monday) is \$100. On Tuesday its price increases 10%, and on Wednesday its price decreases 20%. What is its price on Wednesday?

From what I remember, the "old" and "new" values are reset with each step. So on Tuesday, the old value is \$100 and 10% of \$100 is \$10, so its new value on Tuesday is 100 + 10 = $110. Then this becomes the "old" value on Wednesday, and 20% of \$110 is \$22, so its "new" value on Wednesday is 110 - 22 = \$88. I'm assuming this updating process keeps happening every day (or hour, or other period of time) as stock prices are tracked on the market?

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    $\begingroup$ This is correct. $\endgroup$
    – bb_823
    Commented Nov 3, 2023 at 20:57

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Yes.Whenever a value rises for x%,the new value is (100+x)% of the old one.If the value rises again,let's say for y%,this newest value is (100+y)% of the second one,and not of the first one.So it is acctually 100% of the first value plus x% of the first value plus y% of (100%+x%) of the first value.The same works also if the value decreases,but you should use minus instead of plus.

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