Forum Discussion
Usage average should have returned zero
The changes do sum to zero and, hence, so does the average of the changes. If you express that as a percentage of the initial 1000, it still works. Where it all falls apart is when you express each change as the percentage of the prior value. There is no reason at all to expect such percentages to cancel.
Interesting.
Thank you
Exactly. This can be seen from the fact that an 80% decrease followed by an 80% increase does not return you to the start.
1000 --> 200 --> 360
To get back to 1000 would require a 400% increase, and -80% + 400% ≠ 0.
To add to the pot:
Note that mathematically speaking, if you add, for instance, a 10% to 50 = 55.If you wanted to reverse this operation, it would not be correct to do 55 * 90%, as it results in 49.50.
To reverse this operation correctly; 55 / ( 1+ 10%) = 50.
