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Percentages gains or loss

  1. Jul 3, 2012 #1
    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.
     
  2. jcsd
  3. Jul 3, 2012 #2

    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 ammount 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
     
  4. Jul 3, 2012 #3

    HallsofIvy

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    Staff Emeritus
    Science Advisor

    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%.
     
  5. Jul 4, 2012 #4
    Thanks for the help! I understand now.
     
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