How to Calculate the Declining Value of an Investment

A quick calculation will illustrate how bad an investment is.
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It's an unfortunate truth that not all investments go as well as you hoped. Even after careful research, you may see stock prices taking a dive, real estate devaluing or businesses going belly-up. You can't know how bad things are until you look at the numbers. By comparing the investment's original and current prices, you can calculate your loss as a monetary value or a percentage of the original investment.

Step 1

Locate the current and original value of your investment. The original value is your original purchase price. However, the current value may take a little more research. Stock prices are easily referenced on a myriad of websites, but real estate and business investments may require a professional appraisal.

Step 2

Multiply the investment quantity by the current and original prices to calculate total values. As an example, if you bought 100 shares of stock XYZ for $50, but it recently dropped to $30, multiply 100 times each of the prices. Doing so results in an original value of $5,000, but a current value of $3,000. This step is unnecessary for single-purchase investments, such as real estate.

Step 3

Subtract the original value from the current value to calculate the current numeric loss. Continuing with the example, subtract $5,000 from $3,000 to calculate -$2,000. The negative sign means you incurred a loss.

Step 4

Divide the loss by the original investment value and multiply by 100. Doing so expresses your loss as a percentage of the original investment. In the example, divide -$2,000 by $5,000 to get -0.40. Multiply by 100 to convert the decimal figure to -40 percent. The negative sign means you have a loss of 40 percent.

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