Using a hydrometer, measure the Specific Gravity (S.G.) of the wort before adding the yeast. This initial reading will be above 1.000. Water has an S.G. of 1.000, but since we've added malt and other adjuncts, the S.G. is naturally higher.
Once you have your starting measurement, allow the yeast to do its magic. This converts sugars into alcohol. Since alcohol has a lower S.G. than water, the readings from the hydrometer will go down.
Take a final hydrometer reading just before bottling, before adding the priming sugar. Then we do our math:
All readings are based on 60° F. Add .001 for every 7° above 60°. Why? Think about honey:
Warm honey runs easier than cold honey. If your wort is warm, the hydrometer falls further into it, giving you a lower reading than if you wort was cold.
Let's say our initial reading (Original Gravity) was 1.058 and our last reading (Final Gravity) was 1.009.
Subtract final from original (1.058 - 1.009 = .049)
Multiply this value by 105 (.049 x 105 = 5.145) This is Alcohol by Weight (ABW)
To get Alcohol by Volume, multiply ABW by 1.25 (5.145 x 1.25 = 6.431)
The beer in this example would have 6.43% Alcohol by Volume