The profit on the sale of an investment is calculated by subtracting the initial cost of the investment from the sale price.
Calculating Profit
Here's the formula:
Profit = Sale Price - Initial Cost
For example, if you bought a stock for $100 and sold it for $150, your profit would be:
$150 - $100 = $50
Additional Considerations
- Capital Gains Tax: In many countries, you may have to pay capital gains tax on the profit from selling an investment.
- Transaction Costs: Remember to factor in any trading fees or commissions you paid when buying and selling the investment.
- Investment Holding Period: The length of time you hold an investment can affect your tax liability.
Example:
Let's say you bought 100 shares of a company for $10 per share, a total of $1,000. You then sold those shares for $15 per share, earning $1,500.
- Total Profit: $1,500 - $1,000 = $500
- Profit per Share: $15 - $10 = $5
By subtracting the initial cost from the sale price, you can determine the profit on the sale of your investment.
