Determining the percentage gain or loss of an investment is a relatively simple process. By following a few basic steps, you can calculate the return on your investment and determine whether it was a profitable venture or not.
The first step in calculating the percentage gain of an investment is to determine the initial cost of the investment. This includes any fees or commissions that were paid to purchase the investment. Once you have this figure, you can move on to calculating the current value of the investment.
To determine the current value of the investment, you will need to know the current market price of the asset. This can be found by checking the stock market, commodity prices, or other relevant sources. Once you have this information, you can calculate the current value of your investment by multiplying the number of shares or units you own by the current market price.
Once you have determined both the initial cost and current value of your investment, you can calculate the percentage gain or loss. To do this, simply subtract the initial cost from the current value and divide the result by the initial cost. This will give you a decimal figure, which can be multiplied by 100 to express the gain or loss as a percentage.
For example, if you purchased 100 shares of stock for $10 per share and the current market price is $15 per share, your initial cost would be $1,000 and your current value would be $1,500. To calculate the percentage gain, subtract $1,000 from $1,500 to get $500. Then divide $500 by $1,000 to get 0.5. Multiply 0.5 by 100 to get a percentage gain of 50%.
It’s important to note that this calculation only takes into account the capital gain or loss of the investment. It does not include any dividends or other income that may have been earned from the investment. To calculate the total return on your investment, you will need to factor in any additional income earned.
In addition, it’s important to consider the time frame of the investment when calculating the percentage gain. A short-term investment may have a higher percentage gain than a long-term investment, but it may not be as profitable in the long run. It’s important to consider the overall performance of the investment over time to determine its true profitability.
In conclusion, calculating the percentage gain or loss of an investment is a simple process that can be done by following a few basic steps. By determining the initial cost and current value of the investment, you can calculate the gain or loss as a percentage and determine whether it was a profitable venture or not. However, it’s important to consider additional factors such as income earned and the time frame of the investment when evaluating its overall performance.
