How Do You Calculate Investment Percentage Changes Correctly?

[grandnat_6]

Hi,

I think I confused myself. Must be working too hard or something.

I trying to find the percentage gain or loss of an investment.

example:

1. orginal investment $10000.00 today $9,500.00

9,500.00/10,000.00 = .95*100 = 95%

Therefore I have 95% of my orginal amount or (100%-95%)= 5% loss.

10,000.00*-5%= -500

10,000.00-500= 9,500.00

Or:

10,000.00-9,500.00= 500.00

500.00/9,500.00= .05263*100=5.263%

9500*5.263=500

500+9,500.00= 10,000.00

Please straighten me out on this! They both seem to get me the correct answer but the percentages are different, which one is correct?

What if I started out with $9,500.00 and today it's $10,000.00?

Thanks.

 

[DonAntonio]

Hi,

I think I confused myself. Must be working too hard or something.

I trying to find the percentage gain or loss of an investment.

example:

1. orginal investment $10000.00 today $9,500.00

9,500.00/10,000.00 = .95*100 = 95%

Therefore I have 95% of my orginal amount or (100%-95%)= 5% loss.

10,000.00*-5%= -500

10,000.00-500= 9,500.00

Or:

10,000.00-9,500.00= 500.00

500.00/9,500.00= .05263*100=5.263%

9500*5.263=500

500+9,500.00= 10,000.00

Please straighten me out on this! They both seem to get me the correct answer but the percentages are different, which one is correct?

What if I started out with $9,500.00 and today it's $10,000.00?

Thanks.

UIt is not the same way up as way down in percentages:

if you began with $10,000.00 and after some time you have $9, 500.00 then you've lost 5% of your original invesment, as
$$\frac{9,500}{10,000}=0.05\Longrightarrow 0.05\cdot 100 \%=5\%\,\,\text{loss}$$
as the final amount is less than the first one.

Had you begun with $9,500.00 and after some time you had $10,000,, then you'd have won
$$\frac{10,000}{9,500}=1.05263\Longrightarrow (1-1.05263)\cdot 100\%=5.6263\%\,\,\text{profit}$$

DonAntonio

 

[HallsofIvy]

The "percentage change" is always relative to the initial amount. Going from 10000 to 9500 is a decrease of 500 so a percentage change of -500/10000= -.05 or -5% of 10000.

But an increase from 9500 up to 10000 is an increase of 500 and so a percentage change of 500/9500= .0526 or 5.26%.

 

[grandnat_6]

Thanks for the help! I understand now.

 

[CellCoree]

Hello,

I understand the importance of accuracy and precision in calculations. In this case, both of your methods for calculating the percentage gain or loss are correct. The difference in percentages is due to the order in which you are performing the calculations. In the first method, you are calculating the percentage loss first, then subtracting it from 100% to get the percentage gain. In the second method, you are calculating the percentage gain first, then subtracting it from 100% to get the percentage loss. Both methods will give you the same result, but one will give you the percentage gain while the other will give you the percentage loss.

If you started with $9,500.00 and now have $10,000.00, you have a percentage gain of 5.263% using the second method. This is because you are calculating the percentage gain first, then subtracting it from 100%. If you were to use the first method, you would get a percentage loss of 5.263%. This is because you are calculating the percentage loss first, then subtracting it from 100%.

In conclusion, both of your methods are correct for calculating percentage gain or loss. The difference in percentages is due to the order in which the calculations are performed. It is important to be consistent and clearly state whether you are calculating the percentage gain or loss. I hope this helps clarify things for you. Keep up the good work!