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About $~\$100~$ were given to me as an initial investment. I converted them to INR and traded with it in buying stocks and also selling stocks. I am now left with say $~$*Rs.*$6000~$ today. As all of you are aware that USD prices varies from day to day, I am in a fix as to understand that I really made any profit or not.

My questions are

  1. How to know whether I made any profit or loss?

  2. How to calculate my profits if any?

  3. Is there any inverse relationship between USD and INR? In the sense, will a increase in conversion rates, increase USD and decrease INR values

Any insight will be appreciated

BusyAnt
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Rpj
  • 111

1 Answers1

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Ad 1)

Your initial investment (in rupee) is

$ 100\text{USD} \cdot \frac{61.85 \ \text{INR}}{ 1\text{USD}}=6,185 \ \text{INR}$.

The (absolute) profit is then $6,000 \ \text{INR}-6,185 \ \text{INR}=-185 \ \text{INR}.$

This profit is negative, thus you have a loss of $185 \ \text{INR}$

And your relative profit is $\frac{6,000 \ \text{INR}-6,185 \ \text{INR}}{6,185 \ \text{INR}}\approx -0.03=-3\%$

Ad 2)

I think you can conclude the general formula.

Ad 3)

If you convert USD in INR, than you have the conversion rate $\frac{x \ \text{INR}}{ 1\text{USD}}$. You get x rupees for 1 dollar. If the dollar increase, you get more rupee for one dollar. Thus x has to be increased. You can also say, that the rupee decreases.

If the dollar decreases, you get less rupee for one dollar. Thus x has to be decreased. You can also say, that the rupee decreases.

If you convert INR in USD, than you have the conversion rate $\frac{y \ \text{USD}}{ 1\text{INR}}$. You get y dollars for 1 rupee. If the ruppee increases, you get more dollars for one rupee. Thus y has to be increased. You can also say, that the dollar decreases.

If the ruppee decreases, you get less dollars for one rupee. Thus y has to be decreased. You can also say, that the dollar increases.

callculus42
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