M06, 169

Arithmetic Grade Six

Lesson One Hundred Sixty-nine: Stock Value

The value of a share of stock can always go down in which case the person who invests in it loses money. Consider this example:


	  A share of stock in Company Z was worth $10 one 
	month ago. It is now worth $8. By what percentage
	did the value of this stock drop?

Two Step Solution:

Find the change in value: $8 - $10 = -$2
Find the percentage of change: -2/10 = -.2 (-20%)

Here are some more examples:


	STARTING VALUE	ENDING VALUE	CHANGE		PERCENT
	  $4/share	  $3/share	 down $1/share	 -25%
	 $10/share	  $6/share	 down $4/share	 -40%
	 $15/share	  $9/share	 down $6/share	 -40%
 	 $50/share	 $45/share	 down $5/share	 -10%

Usually the change in value does not come out as nicely as the examples shown so far. Usually a starting value for a stock will be something like $2.33 and the ending value might be something like $2.50. Also you may be expected to report the percent change to the nearest 10th or even 100th of a percent. Here's how you would solve this example:


	STARTING VALUE: $2.33
	ENDING VALUE:   $2.50

	AMOUNT OF INCREASE: $.17
	
	PERCENT CHANGE:

	    .17 ÷ 2.33 = .07961373

	CONVERTED TO PERCENT (ROUNDED TO NEAREST 100TH): 7.96%

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