What is the formula to calculate percentage gain in an investment?

The formula to calculate percentage gain in an investment is derived from the difference between the new value and the old value of the investment relative to the old value. By taking the new value, subtracting the old value, and then dividing this result by the old value, you capture how much the investment has increased as a proportion of what it originally was. Multiplying by 100 converts this proportion into a percentage, making it easier to interpret the gain in relative terms.

For instance, if you originally invested $100 (old value) and the investment grows to $150 (new value), the gain is $150 - $100 = $50. Dividing this gain ($50) by the original investment ($100) gives you 0.5, and multiplying by 100 results in a 50% gain. This calculation clearly shows how much value the investment has added concerning the initial amount invested, providing a straightforward way to understand the performance of the investment.