Answer: $60
Step-by-step explanation:
Given : The formula for percentage increase I (given as a decimal) of an investment is [tex]I=\dfrac{S-P}{P}[/tex], where P is the purchase price and S is the sale price.
If Price of stock S= $75 and the percentage increase of 25% i.e. I=0.25.
Then, to find P , we substitute the values of S and I in the given equation, we get
[tex]0.25=\dfrac{75-P}{P}\\\\\Rightarrow\ 0.25P=75-P\\\\\Rightarrow\ P+0.25P=75\\\\\Rightarrow\ (1.25)P=75\\\\\Rightarrow\ P=\dfrac{75}{1.25}=60[/tex]
Hence, the purchase price of the stock was $60.
