Percentage is a way of expressing a fraction or a ratio as a portion of 100. It is represented by the symbol “%” and is widely used in various fields such as mathematics, finance, and science. Understanding percentages is important for everyday life as it is used to calculate discounts, taxes, interest rates, and many other financial calculations.
Calculation of Percentage:
The calculation of percentage involves three quantities: the base, the rate, and the percentage. The base is the number on which the percentage is based, the rate is the percentage expressed as a decimal or fraction, and the percentage is the amount or proportion of the base that is being considered.
The formula for calculating percentage is:
Percentage = (Rate x Base)/100
For example, if you want to calculate 20% of 100, the rate would be 20/100 or 0.2, and the base would be 100. Using the formula, we can calculate the percentage as follows:
Percentage = (0.2 x 100)/100 = 20
Therefore, 20% of 100 is equal to 20.
Types of Percentages:
There are three types of percentages: increase, decrease, and markup.
Increase Percentage:
Increase percentage is used to calculate the amount by which a value has increased over time. It is calculated as follows:
Increase Percentage = (Increase in Value/Original Value) x 100
For example, if the original value of a product is $100 and the new value is $120, the increase in value is $20. Using the formula, we can calculate the increase percentage as follows:
Increase Percentage = (20/100) x 100 = 20%
Therefore, the increase percentage is 20%.
Decrease Percentage:
Decrease percentage is used to calculate the amount by which a value has decreased over time. It is calculated as follows:
Decrease Percentage = (Decrease in Value/Original Value) x 100
For example, if the original value of a product is $100 and the new value is $80, the decrease in value is $20. Using the formula, we can calculate the decrease percentage as follows:
Decrease Percentage = (20/100) x 100 = 20%
Therefore, the decrease percentage is 20%.
Markup Percentage:
Markup percentage is used to calculate the percentage of profit made on the sale of a product. It is calculated as follows:
Markup Percentage = (Profit/ Cost Price) x 100
For example, if the cost price of a product is $100 and the selling price is $120, the profit is $20. Using the formula, we can calculate the markup percentage as follows:
Markup Percentage = (20/100) x 100 = 20%
Therefore, the markup percentage is 20%.
Applications of Percentage:
Percentages are used in many real-life situations, some of which are:
Discounts: Percentages are used to calculate discounts on products. For example, if a product has a 20% discount, the customer pays only 80% of the original price.
Taxes: Percentages are used to calculate taxes. For example, if a product has a 10% tax, the customer pays an additional 10% of the original price.
Interest Rates: Percentages are used to calculate interest rates on loans and savings accounts. For example, if a savings account has a 3% interest rate, the account holder earns 3% of the account balance annually.
Here are some examples of questions and answers related to percentages:
If a store offers a 20% discount on a $50 item, how much will the item cost after the discount? Answer: The discount amount is 20% of $50, which is $10. So the item will cost $50 – $10 = $40 after the discount.
If a student scored 85% on a test with a total of 100 questions, how many questions did they answer correctly? Answer: 85% of 100 questions is 0.85 x 100 = 85 questions. So the student answered 85 questions correctly.
A company’s revenue increased from $1 million to $1.2 million over the past year. What is the percentage increase in revenue? Answer: The increase in revenue is $1.2 million – $1 million = $200,000. To find the percentage increase, we divide the increase by the original revenue and multiply by 100: ($200,000/$1 million) x 100 = 20%. So the company’s revenue increased by 20% over the past year.
A car dealership sold 400 cars in January and 500 cars in February. What is the percentage increase in sales from January to February? Answer: The increase in sales is 500 cars – 400 cars = 100 cars. To find the percentage increase, we divide the increase by the original sales in January and multiply by 100: (100/400) x 100 = 25%. So the dealership’s sales increased by 25% from January to February.
If a shirt costs $25 and the sales tax rate is 8%, what is the total cost of the shirt including tax? Answer: The sales tax on the shirt is 8% of $25, which is $2. To find the total cost including tax, we add the original price and the tax amount: $25 + $2 = $27. So the total cost of the shirt including tax is $27.
Percentage is an important concept in mathematics and is widely used in everyday life. It is used to calculate discounts, taxes, interest rates, and many other financial calculations. Understanding percentages is important for making informed decisions and managing finances effectively.
