# Basic Mathematics

**The Mathematics Of Bitcoin**

**Calculating Average**

- The central value of a set of data is expressed by the average of a list of data.

- It is defined as the ratio of the total number of units in the list to the sum of all the data.

- The average of a set of numerical data is also known as the mean in statistics.

Sum of Values/Number of Values = Average

**Calculating Percentage**

- A percentage is a number or ratio expressed as a fraction of one hundred.

- If we need to calculate a percentage of a number, we divide it by 100 and multiply it by the whole number.

- As a result, the percentage denotes a fraction of a percent. Per cent denotes one hundredth of a percent.

- The symbol “percent” is used to represent it.

- (Value/Total value)100 = Percentage formula

**Calculating Profit & Loss**

**Profit calculation**

- Profit is made when a product is sold for more than its cost price.

- Profit or Gain = Selling price – Cost Price.

- Profit percent = (Profit / Cost Price) * 100

**Loss calculation**

A loss is the amount a seller loses after selling a product for less than its cost price.

Loss = Cost Price – Selling Price

Loss percent = (Loss / Cost Price) * 100**Calculating Net Profit Margin**

- The net profit margin measures how much net profit or income is generated as a percentage of revenue.

- Net profit margin is typically expressed as a percentage but can also be represented in decimal form.

- The net profit margin illustrates how much of each dollar in revenue collected by a company translates into profit.

- Net Profit Margin = (Revenue - cost) / Revenue

**Calculating Return on Investment or ROI**

- The return on your investment, also known as ROI, shows you how much money you've made on your investment.

- It assists you in selecting the best investment among various investment options.

- In simple terms, the return on investment (ROI) is a financial ratio that allows you to compare the benefits of an investment to the costs.

- The return on investment (ROI) can be positive or negative. If the return on investment is negative, the investment is actually losing money.

- Return on investment is: ROI = (Net Profit / Investment Cost) * 100

**Calculating Interests: Simple & Compound **

- The cost of borrowing money, as in the case of interest charged on a loan balance, is defined as interest.

- In the case of a certificate of deposit, interest can also be the rate paid for money on deposit.

- There are two methods for calculating interest: simple interest and compound interest.

**Simple interest**

**Simple interest**

iT is calculated on the principal, or original, amount of a loan. The formula for calculating simple interest is:

Simple Interest=P×i×n

where:

P=Principal

i=Interest rate

n=Time period of the loan

**Compound interest**

**Compound interest**

It is calculated on the principal amount and the accumulated interest of previous periods, and thus can be regarded as “interest on interest.”

The formula for calculating compound interest in a year is:

Compound Interest=(P(1+i)n)−P

Compound Interest=P((1+i)n−1)

where:

P=Principal

i=Interest rate in percentage terms

n=Number of compounding periods for a year

**Calculating Probability**

- Probability is a metric for determining the likelihood of an event occurring.

- Using it, we can only predict the probability of an event occurring, i.e. how likely it is to occur.

- Probability can range from 0 to 1, with 0 indicating an improbable event and 1 indicating a certain event.

- Probability of an event occurring P(E) = Number of positive outcomes/Total Number of positive outcomes

**Understanding Shares & Dividends**

- Shares and dividends are closely related; shares are proof of ownership in a business, such as a corporation or a cooperative venture

- Whereas dividends are payments made by the business to the shareholders who own the shares.

**Shares**

- Shares are units of equity ownership interest in a corporation that exist as a financial asset that provide for an equal distribution of any residual profits in the form of dividends, if any are declared.

- If the company's value rises, shareholders may benefit from capital gains.

**Dividend**

- A dividend is a distribution of a portion of a company's earnings to a class of shareholders determined by the board of directors of the company.

- As long as they own the stock before the ex-dividend date, common shareholders of dividend-paying companies are usually eligible.

- Dividends can be received in the form of cash or additional stock.

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