Percent Increase with Capital Gains

​Block Day's quiz had a problem, "If you increase 50 by 30% the answer is... 65.

The amount of increase is 15 (30% x 50) but the answer is 65.

2 ways to see it:

50 + .3 x 50 = 50 + 15 = 65

50(1.3) = 65

Check it on your calculator

​When we look at the selling price of a stock, it is the total value of the sell.

shares x purchase price

When we are looking at Capital gain we are looking at the difference of selling price and purchase price.

Selling price - purchase price = gross capital gain

A gross capital loss occurs when your value is negative.

​When we look at percent of change we look at capital gain divided by original purchase price.

Selling price - purchase price = percent of change

purchase price

We get a decimal number then multiply by 100 to change it to a percent value.

​pg. 39 #13

​Zeke bought g shares of stock for w dollars per share.

a) Total purchase price? gx

His broker called him and told him to sell the shares when they earn a 40% capital gain.

b) Express the capital gain algebraically. Since the selling price was 40% more than the purchase price it would be 40% x gx = 0.4gx

c) Zeke decides to sell his shares. Express the total selling price of all the shares algebraically. It has been raised by 40% so the purchase price + increased value become gx + 0.4gx = 1.4gx

​ANOTHER EXAMPLE

​You by 100 shares for $30 each. Purchase price?

100 x $30 = $3000

The value raises by 140%

$30 x 140% = $30 x 1.4 = $42

If the value was raised by $42 then what is the value of each share now?

$30 + $42 = $72 (x + 1.4x = 2.4x) 30 x 2.4 = 72

100 x 72 = 7200

Selling price is $7200 minus Purchase Price which was $3000 which equals $4200. $4200/$3000 = 1.4, 1.4 x 100 = 140%

​I hope this gives you a head start into #14 which is a tough one.

Fill in the Blanks

a) Represent half of the d shares.

Fill in the Blanks

b) Represent the capital gain earned on each of the shares that were sold algebraically.

Fill in the Blanks

c) Represent the capital gain earned on all of the shares that were sold algebraically.

Fill in the Blanks

d) Represent the total value of the shares that were sold algebaically.

Open Ended

e) Did the investment end up as a capital gain or loss? Explain.