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

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

Simple Interest=P×i×n



i=Interest rate

n=Time period of the loan

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)



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 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.


  • 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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