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If I buy a stock for $100.00 and it appreciates to $200.00, what is the best formula to calculate the % increase?

(200-100)/100

or

(200-100)/((200-100)/2)

2006-10-08 03:03:34 · 1 answers · asked by nathan_strahl 1 in Business & Finance Taxes United States

1 answers

The first one is the correct one:

(200-100)/100 = 100/100 = 1

In order to convert that to a percentage (which means per hundred), you then need to continue:
1 = 100/100 = 100 per cent

It is a coincidence that in this case you go from
100/100 = 1 = 100/100.

To illustrate, if a stock had started from some number other than 100, say, from 25 to 32, the solution would have been:
(32-25)/25 = 7/25 = .28 = 28/100 = 28 per cent,

So, the full solution is:
(200-100)/100 = 100/100 = 1 = 100/100 = 100 per cent

2006-10-08 03:35:30 · answer #1 · answered by Jim 5 · 0 0

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