Capital Gains Worksheet

Capital gains is one of those topics students nod along to and then completely blank on the first time a number shows up. They can tell you "you make money when the price goes up," but ask them to actually calculate the gain on 100 shares bought at $20 and sold at $25, and the pencils stop moving. This worksheet closes that gap. It walks students through seven problems built around mutual funds and ETFs, moving from a straightforward buy-low-sell-high calculation up to blended problems involving dividends, percentage gains, and short-term versus long-term tax treatment.

Plan for 30 to 40 minutes if you want students working through the full set with time to discuss the harder problems as a class. The first two or three questions move fast once students see the pattern, so the real teaching happens in the back half, where dividends and taxes enter the picture.

The most common mistake is students calculating gain per share instead of total gain, or forgetting to multiply by the share count at all. The second most common mistake shows up on question 3, where students add the capital gain and the dividend distribution correctly but forget the dividend is a separate line from the price appreciation, so they can't clearly explain what each number represents. Questions 4 through 7 ask students to reason qualitatively about taxes and decision-making, not just compute a number, so expect a wider range of answers there and be ready to accept any response that shows real reasoning.

This works well as individual seatwork for the first three questions, then pairs or small groups for questions 4 through 7, since those require more discussion to talk through. If your class has already covered simple versus compound interest, this is a natural next step in the same unit.

This activity is from Module 10 of the Rapunzl curriculum, ETFs & Mutual Funds.

Calculating Capital Gains with Mutual Funds & ETFs

In this activity, students will learn to calculate capital gains from investments in mutual funds and ETFs, understand the implications of capital gains, and apply these concepts to real-world trading situations.

1. An investor buys 100 shares of a mutual fund at $20 per share and sells them a year later at $25 per share. What is the total capital gain?
2. Calculate the capital gain or loss if an investor buys 200 shares of an ETF at $30 per share and sells them at $27 per share.
3. An investor purchases 150 shares of a mutual fund at $40 per share and receives a dividend distribution of $2 per share during the year. If the shares are sold at $45 per share, calculate the total return, including both capital gains and dividends.
4. An ETF's value has increased by 10% over the year. If an investor purchased 500 shares at the beginning of the year, calculate the capital gain if they sell the ETF now. Assume the initial price per share was $50. Discuss how taxes on these gains might affect the investor's decision to sell.
5. Compare the tax implications of holding a mutual fund for less than a year versus more than a year. Consider the impact of short-term vs. long-term capital gains tax rates on an investor's decision-making.
6. An investor purchased 1,000 shares of a technology-focused ETF at $100 per share five years ago. The ETF's value has grown to $200 per share. However, the investor needs cash and is considering selling. Discuss the factors the investor should consider, including the potential capital gains, the current market conditions, and alternative options.
7. A mutual fund distributes a capital gains distribution of $3 per share. If an investor holds 400 shares, how does this affect their total capital gain or loss, and what should they report for tax purposes?

Teacher Notes

As students work, watch for whether they can explain in their own words what capital gain means before they trust their own arithmetic. A student who gets the right number on question 1 but can't tell you why they subtracted $20 from $25 hasn't actually learned the concept yet, just the shortcut. On questions 4 and 6, listen for whether students bring taxes into the conversation unprompted or need it pointed out to them. That's a good read on how much of the earlier material stuck.

Two discussion prompts worth raising with the full class: First, ask why an investor might choose not to sell an investment even after a large gain, tying back to question 6. Second, ask students to think through why the government treats short-term and long-term gains differently, and what that might encourage investors to do.

For an extension, have students pick a real ETF or mutual fund, look up its price history over the past year, and calculate what their capital gain or loss would have been on a hypothetical 50-share purchase.

The answer key for this activity, along with the other activities in this module, is in the Rapunzl teacher portal.

Want to see the rest of the Rapunzl curriculum before you commit? Book a demo and we'll walk you through the full teacher portal.