You start investing $100 per month toward retirement. You invest in mutual funds in your retirement account and the first month the mutual fund price per share is $10. The second month, the mutual fund falls to $5 per share and you invest your $100 that month at that price. The third month, the mutual fund rebounds a bit and goes up to $7.50 per share and you invest your $100 that month at that price. The big question is: have you made money, lost money, or broken-even with your total investment over the first three months?

To help you put this together, you want to answer the following questions: a) How many mutual fund shares did you purchase? You want to calculate how many shares you purchased each month for the $100 you invested. Remember that mutual funds can be purchased in partial shares so you dont need to buy whole share amounts. b) When you have the total number of shares purchased, you want to multiply the total shares by the current market price per share (which is the price at the end of the problem, e.g. the third month price per share) c) The return (or loss) is calculated by taking the total market value of the investment less the amount paid (basis). The basis is what you invested in dollars. Three months of investing at $100 per month gives you a basis of $300 (3 * $100 per month). The percentage return is taking the amount of gain or loss and divide it by the amount invested, which is the $300 that you invested in this example.