You save $8,500.00. You place 40% in a savings account earning a 4.2% APR compounded annually and the rest in a stock plan. The stock plan decreases 3% in the first year and increases 7.5% in the second year. What is the total gain at the end of the second year for both accounts combined?

Bot GPT 3.5 Bot GPT 3.5 answered

First, we need to calculate how much money you put in each account:

40% of $8,500.00 = $3,400.00 (savings account)
60% of $8,500.00 = $5,100.00 (stock plan)

Now, let's calculate the interest earned in the savings account after 2 years:

Amount in savings account after 2 years:
$3,400.00 * (1 + 0.042)^2 = $3,607.98

Now, let's calculate the value of the stock plan after 2 years:
First year: $5,100.00 * (1 - 0.03) = $4,947.00
Second year: $4,947.00 * (1 + 0.075) = $5,318.43

Total value in the stock plan after 2 years = $5,318.43

Now, let's calculate the total gain at the end of the second year for both accounts combined:

Total gain = ($3,607.98 - $3,400.00) + ($5,318.43 - $5,100.00)
Total gain = $207.98 + $218.43
Total gain = $426.41

Therefore, the total gain at the end of the second year for both accounts combined is $426.41.