Ask Experts Questions for FREE Help !
Ask
    garyids's Avatar
    garyids Posts: 1, Reputation: 1
    New Member
     
    #1

    Dec 1, 2010, 08:49 AM
    Currency question
    Say the Pound V Dollar rises 80% then on the Dollar V Pound its fallen -44.444%

    I work it out as follows:-

    0.8 Divided by 1.8 = 0.444

    What I can't work out is:-

    If I know the Dollar V Pound as fallen -44.44%

    How do I get its an 80% rise on the Pound V Dollar using -44.444?

    Thanks

    Gary
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
    Expert
     
    #2

    Dec 1, 2010, 10:31 AM

    This mathematical confusion occurs whenever you try to compare things using using percent gains or loss based on two different bases. In your example the math works out so that the ratio of the value of pound versus dollar is the reciprocal of the value of dollar versus pound:



    So yes, your math is correct.

    Here's another example of the same effect: consider whether it's better to invest money and get a flat 20% return, or make an investment that first gives you a 100% return which is then followed by an 80% loss. It may sound like the result should be the same, but it's not. If you have $100 to invest the former gives you a $20 profit, whereas the latter causes you to lose $60. That's a big difference!

Not your question? Ask your question View similar questions

 

Question Tools Search this Question
Search this Question:

Advanced Search


Check out some similar questions!

Value of US currency [ 1 Answers ]

I have a 1953 series C $2 bill red seal in UNC condition (A74652563A) which is misprinted so that the red seal overlaps the "TW" of the "TWO" and protrudes to the left. The red serial number is also moved to the left. I have not seen this error on any other 1953 bill or any bill at all. Any...

L1 Visa - medical expenses and foreign currency salary question [ 7 Answers ]

Hi all I will be working in the US from 1. Mar 2009 till 28. Feb 2010. As I am in the US for more than 183 days in 2009, I will have to file like a resident alien. At the moment I am Swiss tax resident. My employer is paying the salary in Swiss Francs to my Swiss bank account during that...

Old currency [ 4 Answers ]

Hi, My grand parents passed away last year and they collected a lot of old coins and some old currency notes and I was wondering what they were worth. I have a 1 dollar silver certificate that is from the series 1928A serial number Z58728894A. It looks to be in VF to XF condition, has a blue...

You.S. Currency [ 4 Answers ]

I'd like to know 1928 silver certificate star note graded CGA 63 unc. Is worth. Please confirm Thanks Paul


View more questions Search