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Friendly Reminder of The Math of Gains And Losses: After a 69%, You Would Need 222.58% Gain To Even

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by COINS NEWS 03/09 107 Views

Friendly Reminder of The Math of Gains And Losses: After a 69%, You Would Need 222.58% Gain To Even

A lot of people doesn't know or forgets (I include myself) the importance of knowing about The Math of Gains And Loses.

We use to think that when an investment drops 50%, we would need just 50% up to get even but that is incorrect. We would need 100% gain to make even.

In this table you can see how much you would need to get even depending on the % loss:

Initial balance Percentage loss Balance after loss Need percentage gain to restore loss Ending balance after gain
$1,000 -5% $950 5.26% $1,000
$1,000 -10% $900 11.11% $1,000
$1,000 -15% $850 17.65% $1,000
$1,000 -20% $800 25.00% $1,000
$1,000 -25% $750 33.33% $1,000
$1,000 -30% $700 42.86% $1,000
$1,000 -35% $650 53.85% $1,000
$1,000 -40% $600 66.67% $1,000
$1,000 -45% $550 81.82% $1,000
$1,000 -50% $500 100.00% $1,000
$1,000 -55% $450 122.22% $1,000
$1,000 -60% $400 150.00% $1,000
$1,000 -65% $350 185.71% $1,000
$1,000 -70% $300 233.33% $1,000
$1,000 -75% $250 300.00% $1,000
$1,000 -80% $200 400.00% $1,000
$1,000 -85% $150 566.67% $1,000
$1,000 -90% $100 900.00% $1,000
$1,000 -95% $50 1900.00% $1,000

​

Recovery Percentages chart

You can easily calculate it with this formula:

Needed % gain to restore loss = [1 / (1 - % Loss)] - 1

For example, the needed gain to restore a 10% loss can be expressed as:

 [1 / (1 - .10)] - 1 = .1111 or 11.11%

I know that you are going to hate me for messing up the party but I had to bring some perspective to you.

I hope it helps you to have more perspective about gains and losses and see why it is important to DCA down or even sell projects that you don't have faith in.

Thanks for reading my post and I hope you learned something and enjoyed it.

See you!

submitted by /u/kirtash93
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