All Forum Posts by: Karen Sandvoss

Can someone check my math? I think there's a typo in chapter 17 hone your skills question 2. $173,000 / 65,000 should give an EM of 2.66, not 1.66 as stated in the answer section. Correct?

Quote from @Barry W Bahr:

Can you explain the answer to the third question in Hone Your Skills Chapter 7 page 100. My answer was $2500. The correct answer according to the book is $500. Here is my calculation: (30000 x 20%) + (0 x 45%) + (-10000 x 35%) = 6000 + 0 -3500 = 2500.

The book is correct because the first outcome is tripling your money, meaning you put in $10,000 and got back $30,000 but that's a $20,000 profit (not $30,000 as you calculated). So you'd be multiplying $20, 000 by 20% to get $4,000. The rest of your calculations are correct. $4,000 - $3,500 equals $500.

I think I found another typo in chapter 12 hone your skills question 2. Correct me if I'm wrong but it should be $385,000 / 27.5 = $14,000. Right? I'm loving this book though. And I'm very grateful to have this book club forum. Thanks!