Percent Gain and Loss

Learn how to calculate and interpret percentage gains and losses on investments.

Intermediate20 minLesson

Definition

Percent gain measures how much an investment has increased as a percentage of its original value. Percent loss measures how much it has decreased.

The formula for percent change is:

If the result is positive, it's a gain
If the result is negative, it's a loss

For example, if a stock goes from 100 dollars to 125 dollars:

Try it now

A stock goes from 100 dollars to 120 dollars. What is the percent gain?

Worked Examples

You bought shares for 80 dollars and sold them for 100 dollars. What is your percent gain?

Identify the values

Original value = 80 dollars, New value = 100 dollars → Values identified

Find the change

dollars profit → Change = 20 dollars

Divide by original

→ Decimal = 0.25

Convert to percent

→ 25% gain

Answer: You made a 25% gain on your investment.

Common Mistakes

Using the new value as the denominator

Why it's wrong: Percent change is always relative to the ORIGINAL (starting) value, not the new value.

Correct: Always divide by the original value:

Thinking a 50% loss and 50% gain cancel out

Why it's wrong: After a 50% loss, you have half your money. A 50% gain on half is only 75% of original.

Correct: 100 dollars - 50% = 50 dollars. Then 50 dollars + 50% = 75 dollars. You still lost 25%!

Forgetting to multiply by 100

Why it's wrong: The formula gives a decimal. You must multiply by 100 to get a percentage.

Correct: is not 25%. You must write

Interactive Visual

Bar Chart

Part A(25%)

Part B(35%)

Part C(20%)

Part D(20%)

Interactive Sandbox

Expression Calculator

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History

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Practice Problems

17 problems

Problem 1 of 17

Easy

A stock goes from 100 dollars to 120 dollars. What is the percent gain?

Why It Matters

Understanding percent gain and loss is essential for:

Evaluating investments: Is your portfolio growing or shrinking?
Comparing opportunities: Which investment had better returns?
Setting goals: How much do you need to gain to reach your target?
Understanding risk: A 50% loss requires a 100% gain to recover!

Every investor, from beginners to professionals, uses these calculations daily to make informed decisions.

Real World Applications

Stock Market Returns

Investors track percent gains and losses to evaluate their portfolio performance.

Example:

If you invested 1000 dollars and your portfolio is now worth 1150 dollars, you have a gain.

1Try It Yourself

You bought shares for 200 dollars. They are now worth 250 dollars.

What is your percent gain?

Step 1: Write the mathematical expression

Calculate:

Comparing Investment Options

Percent change helps compare investments of different sizes.

Example:

Investment A: 500 dollars becomes 600 dollars (20% gain). Investment B: 2000 dollars becomes 2300 dollars (15% gain). Investment A performed better even though B earned more dollars.

2Try It Yourself

Fund X went from 40 dollars to 52 dollars per share. Fund Y went from 100 dollars to 120 dollars per share.

Which fund had the better percent return?

Step 1: Write the mathematical expression

Calculate percent change for each fund

Key Takeaways

1Percent change =
2Positive result = gain; Negative result = loss
3Always divide by the ORIGINAL value, not the new value
4Losses hurt more than equivalent gains (50% loss needs 100% gain to recover)
5Percent change lets you compare investments of different sizes fairly

Frequently Asked Questions

Percent change measures how much the value changed relative to where it started. The original value is your reference point. If you used the new value, you'd be measuring something different.

Glossary

Percent gain: The increase in value expressed as a percentage of the original value
Percent loss: The decrease in value expressed as a percentage of the original value
Original value: The starting amount or purchase price of an investment
Break even: When the current value equals the original investment (0% gain or loss)
Return: The profit or loss on an investment, often expressed as a percentage