problem: compare the dollar return (bitcoin vs Ethereum)

[lakeheadca]

How come profit is same on both coins when input was the same amount, though the price increased significantly in the first one. where am i going wrong, is it my logic

---------------------------------
1 bitcoin price=50000
1 bitcoin value 7% up = 50000x.07 = 3500
New bitcoin price = 53500
invested (500=.01 bitcoin) when the price was 50000
With new bitcoin price =53500 and my profit 50000 * .01=535
so profit was 35
---------------------------------------
1 Ethereum price 5000
1 ETH value 7% up = 5000x.07 = 350
New ETH price = 5350
invested (500=0.1 ETH) when the price was 5000
With new ETH price =5350 and my profit 5350 * .1=535
so profit was 35
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please help me, in both coins: if i put 500 dollars, what will be my 1 dollar value after price increment. is 535/500=1.07 both cases

 

[BigBeachBanana]

Your logic is correct. It's because you have the same rate of return, and you're investing the same amount of dollars over the same period.
[math]\text{Initial value}(1+ \frac{\text{rate of return}}{t})^t=\text{Final value}[/math]You assumed 7% of the profit was earned over the same period, for this example, let's say over a year.
For Bitcoin, your profit is 7% of 500 =35
Similarly, for Ethereum, your profit is 7% of 500 =35

Now let's say bitcoin has a semi-annual rate of return of 7% then:
[math]500(1+\frac{0.07}{2})^2= 535.6125[/math]For every dollar you invest you get an additional $0.07, regardless of which coin you invested in.

 

[lev888]

How come profit is same on both coins when input was the same amount, though the price increased significantly in the first one. where am i going wrong, is it my logic

---------------------------------
1 bitcoin price=50000
1 bitcoin value 7% up = 50000x.07 = 3500
New bitcoin price = 53500
invested (500=.01 bitcoin) when the price was 50000
With new bitcoin price =53500 and my profit 50000 * .01=535
so profit was 35
---------------------------------------
1 Ethereum price 5000
1 ETH value 7% up = 5000x.07 = 350
New ETH price = 5350
invested (500=0.1 ETH) when the price was 5000
With new ETH price =5350 and my profit 5350 * .1=535
so profit was 35
----------------------------------------------------
please help me, in both coins: if i put 500 dollars, what will be my 1 dollar value after price increment. is 535/500=1.07 both cases

If the asset you bought goes up 7%, then you get 7% profit, regardless of what the asset is.

 

[blamocur]

Your logic is correct. It's because you have the same rate of return, and you're investing the same amount of dollars over the same period.
[math]\text{Initial value}(1+ \frac{\text{rate of return}}{t})^t=\text{Final value}[/math]You assumed 7% of the profit was earned over the same period, for this example, let's say over a year.
For Bitcoin, your profit is 7% of 500 =35
Similarly, for Ethereum, your profit is 7% of 500 =35

Now let's say bitcoin has a semi-annual rate of return of 7% then:
[math]500(1+\frac{0.07}{2})^2= 535.6125[/math]For every dollar you invest you get an additional $0.07, regardless of which coin you invested in.

Good answer, but if you are a perfectionist you might find using \left and \right parentheses aesthetically more appealing, as in

[imath]\left(1+\frac{0.07}{2}\right)^2[/imath]

[imath]\left(\frac{o}{o}\right)[/imath]

 

[BigBeachBanana]

Good answer, but if you are a perfectionist you might find using \left and \right parentheses aesthetically more appealing, as in

[imath]\left(1+\frac{0.07}{2}\right)^2[/imath]

[imath]\left(\frac{o}{o}\right)[/imath]

Thanks for the input, will keep that in mind in the future.