Math Problem: Bill Gates’ Investment Challenge: Can You Predict the Profit?

Bill Gates, known for his keen eye for innovative businesses, invested in a promising tech startup called InnovateAI. The startup specializes in cutting-edge AI applications, and after securing Bill’s investment, it began scaling rapidly. Over the next two years, the company’s value fluctuates, reflecting the unpredictable yet rewarding nature of the tech industry.

Word Problem

Bill Gates invests \$1 million in InnovateAI. By the end of the first year, the startup’s value increases by 40%. However, during the second year, due to a market correction, the value decreases by 25%. Despite the fluctuation, Gates decides to sell his shares at the end of the second year.

Question: What is the profit or loss Bill Gates makes from his investment at the end of the second year?

Options:
A. \$25,000 profit
B. \$50,000 profit
C. \$50,000 loss
D. \$100,000 profit

Explore more problems on this topic at Profit, Loss & Partnership or sign up on LearnTheta’s AI-Powered Practice Platform.