“Coming together is a beginning; keeping together

is progress; working together is success.”

1
…..Henry Ford
CHAPTER

2 Percentage
The term percentage is quite frequently used in our day to day life especially to avoid fractions less
than 1. Instead of treating the complete entity as 1, we treat it as 100, and take the ratios
accordingly. We’ll be discussing the various applications such as interests, profit and loss,
partnerships etc in this chapter.

Percentage

Per Cent: The term per cent means for every hundred. A fraction whose denominator is 100 is called
a percentage and the numerator of the fraction is called the rate per cent. It is denoted by the
symbol %.

To find the % equivalent of a fraction: Express the fraction with the denominator 100 and the
numerator is the required answer.
11 5
11 24 × 100 45 6 5
E. g. , = = = 45 %
24 100 100 6
To find the fraction equivalent of ‘a %’: Divide ‘a’ by 100.
7
7 21 8 175 7
E. g. , 21 % = = =
8 100 800 32
100+rate
To increase a number by a given %: Multiply the number by the factor 100
E.g., increase 20 by 15%
100 + 15 115
20 × ( ) = 20 × = 23
100 100
OR 20 × 1.15 = 23
100−rate
To decrease a number by a given %: Multiply the number by the factor
100
E.g., decrease 30 by 20%
100 − 20 80
30 × ( ) = 30 × = 24
100 100
OR 30 × 0.8 = 24

To find the % increase of a number:

total increase
% increase = × 100
initial value
Final value − Initial value
= × 100
Initial value
E.g., The population of a village in 1980 was 3000 and in 1990 was 3200. Find the % increase.

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 Percentage

3200−3000
% increase = 3000
× 100
200
= × 100 = 6.67%
3000

To find the % decrease of a number:

Total decrease
% decrease = × 100
Initial value
Initial value − Final value
= × 100
Initial value
E.g., The cost of a bike last year was ₹ 19000. Its cost this year is ₹ 17000. Find the % decrease in its
cost.
19000−17000
% decrease = 19000
× 100
2000
= × 100 = 10.5%
19000

Note:
(i) If the price of a commodity increases by r%, then reduction in consumption, so as not to
r
increase the expenditure is (100+r × 100) %
(ii) If the price of a commodity decreases by r%, then the increase in consumption so as not to
r
decrease the expenditure is (100−r × 100) %
r
(iii) If A’s income is r% more than that of B, then B’s income is less than that of A by ( × 100) %
100+r
r
(iv) If A’s income is r% less than that of B, then B’s income is more than that of A by ( × 100)%.
100−r

Example: A shopkeeper marks the selling price of an article 20% above it’s cost price, but allows
6% discount on the marked price to a customer. What price will a customer has to pay for
an article which cost the shopkeeper ₹ 845?
100+20
Solution: Marked price of the article = 845 × ( ) = 845 × 1.2 = ₹ 1014
100
100−6
Price after discount = 1014 × ( 100
) = 1014 × 0.94 = ₹ 953.16

Example: The total population of a country is 294000, out of which 150000 are males. Out of every
100 males, 98 can read and write, but only 53% of the total population can do so. Find the
percentage of women who can read and write?
98
Solution: Number of men who can read and write = 150000 × 100 = 147000
53
Number of men and women who can read and write = 294000 × 100 = 155820
Number of women who can read and write = 155820 − 147000 = 8820
Thus out of 144000 women 8820 can read and write.
8820×100
∴ Required percentage = = 6.125%
144000

Example: If the price of coal be raised by 20%, then find by how much a householder must reduce
his consumption of this commodity so as not to increase his expenditure?

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 Percentage

20 20
Solution: Reduction in consumption = (100+20 × 100) % = (120 × 100) % = 16.67%

Example: A’s income is 10% more than B’s. How much is B’s income less than that of A’s?
10 1000
Solution: B’s income less than that of A’s by ( × 100) % =( )% = 9.09%
100+10 110

Example: 75% of a number when added to 75 is equal to that number. What is the number?
Solution: Let the required number be ‘x’.
∴ 0.75x + 75 = x
⟹ 0.25x = 75
75
⟹x= = 300
0.25

Simple Interest and Compound Interest

When a sum of money is lent by A to B, A is called the lender (creditor), B the borrower (debtor).
The sum lent is called the principal (P).
Interest (I) is the extra money paid by the borrower to the lender for the use of the money for a
specified time.
The time for which the money is borrowed is called period (N).
The extra amount paid per 100 rupees in a year is called rate per cent per annum (R).
The sum of interest and principal is called the Amount (A).
A=P+I

Simple Interest (S.I.): When interest is paid as it falls due, it is called simple interest i.e., throughout
the loan period, interest is charged on the original sum (principal) borrowed.
PNR
S. I. =
100
Where, P = Principal, N = No.of years, R= Rate of interest
E.g., Find the interest to be paid on ₹ 1500 at 9% per annum for a period of 3 years.
P = 1500, R = 9%, N = 3 years
PNR 1500 × 3 × 9
S. I. = = = ₹ 405
100 100

Compound Interest (C.I.): Money is said to be lent at compound interest when at the end of a year or
other fixed period, the interest that has become due is not paid to the lender, but is added to the sum
lent, and the amount thus obtained becomes the principal for the next year or period. The process is
repeated until the amount for the last period has been found. The difference between the final
amount and the original principal is the compound interest (C.I.).
In compound interest, the interest is calculated on the accrued interest also.
R N
Amount = P [1 + 100]
Where, P = Principal, N = No.of years, R= Rate of interest
Compound Interest = Amount – Principal

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 Percentage

Note:
(i) The time period after which the interest is added each time to form a new principal is called
conversion period. It may be annually, semi annually, quarterly or monthly.
(ii) In case, interest is paid semi annually (half yearly) N is the number of half years and R is the
rate percent per half year i.e.,
Number of years × 2 = Number of half years.
Rate percent per annum ÷ 2 = Rate percent per half year.
(iii) In case interest is paid quarterly, N is the number of quarters and R is the rate percent per
quarter.
Number of years × 4 = Number of quarters
Rate percent per annum ÷ 4 = Rate percent per quarter.
(iv) When rates are different for different years, say R1, R2, R3 percent of 1st, 2nd and 3rd years
1 R 2 R 3 R
respectively then Amount = P (1 + 100 ) (1 + 100 ) (1 + 100 )
x
(v) In case the time is a fraction of a year, say y z years, then
x
R y z
×R
Amount = P (1 + 100
) × (1 + 100 )

Population Formula: The original population of a town is P and the annual increase is R%, then the
R n
population in ‘n’ years is P (1 + ) and if the annual decrease is R%, then the population in ‘n’
100
R n
years is given by a change of sign in the formula i.e., P (1 − )
100
E.g., If the annual increase in the population of a town is 4% and the present population is 15625
what will be the population in 3 years?
Required population = 15625 (1.04)3 = 17576

Hire Purchase: In a hire purchase plan, a customer can make use of the goods while paying for them.
The amount paid at the time of purchase is called the down payment. The remainder is paid in equal
installments and each is the monthly installment. The difference between the total amount to be
paid and the cash price is called the installment charge.
Amount to be paid−Down payment
Monthly Installment =
Number of instalments
E.g., If a transistor is available at ₹ 400 each or ₹ 100 down payment and ₹ 70 per month for 5
months, find
(i) Total amount paid for it
(ii) The installment charge
Amount paid = 100 + 70 × 5 = ₹ 450
Installment charge = 450 – 400 = ₹ 50

Example: If the annual increase in the population of a town is 4% and the present population is
17576, what was it three years ago?
104 3
Solution: Population 3 years ago × (100) = present population
26×26×26
∴ Population 3 years ago × 25×25×25 = 17576
25×25×25
∴ Population 3 years ago = 17576 × 26×26×26 = 15625

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 Percentage

Example: ‘A’ lent ₹ 600 to ‘B’ for 2 years, and ₹ 150 to ‘C’ for 4 years and received altogether from
both ₹ 90 as interest. Find the rate of interest, if simple interest is being calculated.
Solution: ₹ 600 for 2 years = ₹ 1200 for 1 year and ₹ 150 for 4 years = ₹ 600 for 1 year
∴ Total principal = ₹ 1800 for 1 year
90×100
Interest = ₹ 90; ∴ Rate = 1800×1 = 5%

1 1
Example: If ₹ 5600 amounts to ₹ 6678 in 3 2 years, what will ₹ 9400 amount to in 5 4 years at the
same rate percent per annum simple interest?
Solution: We first find the rate percent as follows:
Interest on ₹ 5600 = ₹ 6678 – ₹ 5600 = ₹ 1078
100×1078 2×100×1078 1
∴ Rate % = 1 = =5
5600×3 5600×7 2
2
9400×21×11 10857
Interest on ₹ 9400 = ₹ = = ₹2714.25
100×4×2 4
∴ The required amount = ₹ 9400 + ₹ 2714.25 = ₹ 12114.25

Example: On what sum will the difference between the simple and compound interests for 3 years at
5 percent per annum amount to ₹ 12.20?
Solution: Compound Interest on Re. 1 for 3 years at 5 percent
5 3 1261
= {(1 + ) − 1} =
100 8000
15
Simple Interest on Re. 1 for 3 years at 5 percent = 100
1261 15 61
∴ Difference = 8000 − 100 = 8000
61
But the given difference is ₹ 12.20 or ₹
5
61/5 8000
∴ Sum = = = ₹1600.
61/8000 5

1
Example: Find the present worth of ₹ 481.25 due 2 2 years hence, reckoning simple interest at 4
percent per annum. What is the discount?
1
Solution: Interest on ₹ 100 for 2 2 years at 4 percent = ₹ 10
∴ Amount of ₹ 100 = ₹ 100 + ₹ 10 = ₹ 110
∴ Present worth of ₹ 110 = ₹ 100
1 100
∴ Present worth of ₹ 481 4 = ₹ 110 × 481.25 = ₹ 437.50
Discount = ₹ 481.25 – ₹ 437.50 = ₹ 43.75
The discount may also be found directly thus:
The discount on ₹ 110 = ₹ 10
10
The discount on ₹ 481.25 = ₹ 110 × 481.25 = ₹ 43.75

Alternative method
By applying the formula:
100A
Present worth = 100+RT.we get

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 Percentage

100×481.25 48125
Present worth = ₹ 1 =₹ 110
= ₹ 437.50
100+4×2
2
A×R×T
Also, total discount = 100+RT
1
481.25×4×2 481.25×10
∴ Total discount = 1
2
=₹ 110
= ₹ 43.75
100+4×2
2

1
Example: ‘A’ owes ‘B’ ₹ 456.75 payable 4 2 months hence and ‘B’ owes A ₹ 455.51 payable 3 months
hence. If they agree to settle their account by a ready money payment, what sum should
be paid over and to whom, reckoning the rate of true discount at 4 percent per annum?
1 3
Solution: A’s debt: P = ₹ 456.75, time = 4 2 months = 8 year
203
Rate = 4 percent; ∴ Amount of ₹ 100 = Rs 2
203
Present worth = ₹ 456.75 ÷ × 100 = ₹ 450
2
B’s debt; P = ₹ 455.51
1
Time = 3 months = year, rate = 4 percent.
4
100
Present worth = ₹ 455.51 × 101 = ₹ 451
Hence the required sum to be paid to A = ₹451 – ₹450 = Re. 1

Profit and Loss

Cost Price (CP): The price for which an article is bought is called its cost price.

Selling Price (SP): The price at which an article is sold is called its selling price.

Profit (Gain): The difference between the selling price and cost price is called the profit. For profit,
selling price should be greater than cost price.

Loss: The difference between the cost price and the selling price is called the loss. When cost price
is greater than the selling price, there is a loss.
Profit and loss is generally represented as a percent of the cost price, unless otherwise stated.

Overhead charges: If an individual has to spend some money on transportation etc., then this extra
expenditure is called overhead charges.

Marked price (MP): The price on the label is called the marked price or list price.

Discount: The reduction made on the ‘marked price’ of an article is called discount. When no
discount is given, ‘selling price’ is the same as ‘marked price’.
List of Formulae
(i) Profit = SP – CP … (SP > CP)
(ii) Loss = CP – SP … (CP > SP)
Profit SP−CP
(iii) % Profit = CP
× 100 = CP × 100
Loss CP−SP
(iv) % Loss = CP × 100 = CP × 100
Profit %×CP
(v) Profit = 100

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 Percentage

Loss %×CP
(vi) Loss =
100
100+Profit %
(vii) SP = 100
× CP
100−Loss%
(viii) SP = 100
× CP
(ix) SP = Marked Price – Discount
100
(x) CP = SP × ( )
100+Profit %
100
(xi) CP = SP × (100−Loss%)
Discount
(xii) % Discount = Market Price × 100

Some important points

(i) If two items are sold, each at ₹ X, one at a gain of p% and the other at a loss of p%, there is an
p2 2p2 x
overall loss given by 100%. The absolute value of the loss is given by 1002 −p2
(ii) If CP of two items is the same and % Loss and % Gain on the two items are equal, then net loss
or net profit is zero.
(iii) Buy x get y free i.e., if x + y articles are sold at cost price of x articles, then the percentage
y
discount = x+y × 100.
(iv) By using false weight, if a substance is sold at cost price, the overall gain % is given by
100+Gain % True Scale or Weight Error
100
= False Scale or Weight or profit %= True Value−Error × 100
ab
(v) In case of successive discount a% and b%, the effective discount is (a + b − 100) %.

Example: A boy buys eggs at 9 for ₹ 16, and sells them at 11 for ₹ 20. What is his gain or loss
percent?
Solution: To avoid fractions, let the number of eggs bought and sold be the LCM of 11 and 9, i.e. 99.
99×16 99×20
CP of 99 eggs = 9
= 176; SP of 99 eggs = 11
= 180
Profit on ₹ 176 = 4
4×100 3
% Profit = 176
= 2 11 % = 2.272%

Example: A dishonest dealer professes to sell his goods at cost price, but he uses a weight of 960 gm
for the kg weight. Find his gain percent.
Solution: Supposing the goods cost the dealer Re. 1 per kg., he sells for Re. 1 goods which cost his ₹
0.96.
0.04×100 1
Gain on ₹ 0.96 = 0.04; % Gain = = 4 % = 4.16%
0.96 6

Alternatively,
100+Gain% 1000
By using the formula; 100
= 960
∴ Gain% = 4.16%

Example: A trader allows a discount of 5% for cash payment. How much percent above the cost
price must he mark his goods to make a profit of 10%?
Solution: Let the CP be ₹ 100.

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 Percentage

95% of the MP = ₹ 110

100 15
MP = 95
× 110 = ₹115 19 = ₹115.79
∴ He should mark his product 15.79% above the cost price.

Example: A trader allows two successive discounts of 20% and 15%. If he gets ₹ 136 for an article,
find its marked price.
ab 20×15
Solution: Effective discount = (a + b − 100) % = (20 + 15 − 100
) % = 32%
∴ If MP is 100, then SP = 100 – 32 = 68
136×100
∴ If SP = 136, MP = = ₹200
68

Partnership
Partnership is an association of two or more persons who invest their money in order to carry on a
certain business. A partner who manages the business is called the working partner and the one
who simply invests the money is called the sleeping partner.
If the capitals of the partners are invested for the same time, the partnership is called simple, and if
for different periods, compound.
If the period of investment is the same for each partner, then the profit or loss is divided in the ratio
of their investments.
(i) If A and B are partners in a business, then:
Investment of A Profit of A
=
Investment of B Profit of B
Investment of A Loss of A
OR Investment of B = Loss of B
(ii) If A, B and C are partners in a business, then:
Investment of A : Investment of B : Investment of C
= Profit of A : Profit of B : Profit of C OR Loss of A : Loss of B : Loss of C
If the period of investment is different, then the profit or loss is divided in the ratio of their Monthly
Equivalent Investment.
Monthly Equivalent Investment is the product of the capital invested and the period for which it is
invested.
If A and B are partners in a business, then,
Monthly Equivalent Investment of A Profit of A
=
Monthly Equivalent Investment of B Profit of B
Investment of A × Period of Investment of A Profit of A
i. e. , =
Investment of B × Period of Investment of B Profit of B
Monthly Equivalent Investment of A Loss of A
=
Monthly Equivalent Investment of B Loss of B
Investment of A × Period of Investment of A Loss of A
i. e. , =
Investment of B × Period of Investment of B Loss of B
If A, B and C are partners in a business, then,
Monthly Equivalent Investment of A: Monthly Equivalent Investment of B : Monthly Equivalent
Investment of C = Profit of A : Profit of B : Profit of C
OR

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 Percentage

Monthly Equivalent Investment of A: Monthly Equivalent Investment of B : Monthly Equivalent

Investment of C = Loss of A : Loss of B : Loss of C

Example: Three partners A, B and C invest ₹ 1600, ₹ 1800 and ₹ 2300 respectively in a business.
How should they divide a profit of ₹ 399?
Solution: Profit is to be divided in the ratio 16 : 18 : 23
16 16
A’s share of profit = 16+18+23 × 399 = 57 × 399 = ₹112
18
B’s share of profit = 57 × 399 = ₹ 126
23
C’s share of profit = 57 × 399 = ₹ 161

Example: A, B and C enter into a partnership. A advances ₹ 1200 for 4 months, B gives ₹ 1400 for 8
months and C gives ₹ 1000 for 10 months. They gain ₹ 585 altogether. Find the share of
profit each.
Solution: Monthly Equivalent Investment of A = 1200 × 4 = 4800
Monthly Equivalent Investment of B = 1400 × 8 = 11200
Monthly Equivalent Investment of C = 1000 × 10 = 10000
Profit is divided in the ratio 48 : 112 : 100, i.e., 12 : 28 : 25
12
A’s share of profit is 65 × 585 = ₹ 108
28
B’s share of profit is 65 × 585 = ₹ 252
25
C’s share of profit is × 585 = ₹ 225
65

Example: Three men A, B and C subscribe ₹ 4700 for a business. A subscribes ₹ 700 more than B and
B subscribes ₹ 500 more than C. How much will each receive out of a profit of ₹ 423?
Solution: If C subscribes ₹ x, then,
B subscribes ₹ (x + 500) and A subscribes ₹ (x + 1200)
∴ x + x + 500 + x + 1200 = 4700  x = 1000
∴ Ratio of profits of C, B and A = 1000 : 1500 : 2200 i.e. 10 : 15 : 22
10
∴ C’s share of profit = 47 × 423 = ₹ 90
15
∴ B’s share of profit = 47 × 423 = ₹ 135
22
∴ A’s share of profit = 47 × 423 = ₹ 198

Example: A and B enter into a partnership. A puts in ₹ 2000 but at the end of 3 months, withdraws ₹
500 and again at the end of 8 months withdraws ₹ 300. Out of a total profit of ₹ 900 at the
end of the year, B’s share was ₹ 400. Find B’s capital.
Solution: Ratio of profits
= (A’s ₹ 2000 for 3 months) + (A’s ₹ 1500 for 5 months) + (A’s ₹ 1200 for 4 months) :
(B’s capital x for 12 months)
18300 500
= (6000 + 7500 + 4800): 12x = = ;
12x 400
1525 5
∴ = ; ∴ x = ₹1220
x 4

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 Percentage

Stocks and Shares

Face value: The price of a share is printed on the share certificate. It is called the face value of the
share. (Nominal value).
Dividend: Every shareholder of a company is entitled to a proportionate share of the profits of the
company. The amount of profit on each share is called the dividend. Dividend is expressed as a
percentage of the face value.

Market Value: In the market the selling price of the share may be different from its face value. Thus,
the market value of a share is fluctuable price. In the market, three types of shares are available.

(i) Premium share: If the market price of a share is more than the nominal value, then it is called a
premium share.
(ii) Par share: If the market price of a share is equal to the nominal value, then it is called a par
share.
(iii) Discount share: If the market price of a share is less than the nominal value, then it is called a
discount share.

Different kinds of shares

There are two kind of shares:
(i) Preference shares: On these shares a fixed rate of dividend is paid to share holders irrespective
of whether the company makes any profits or whether it runs into loss. In case the company is
not able to pay the agreed dividend to preference shareholders, the dividend on cumulative
preference shares goes on accumulating and is paid as and when the company can do so.
(ii) Equity shares: The profit of the company that is left over after its distribution to the preference
shareholders is distributed among the equity share holders. This dividend on equity share may
sometimes be more or sometimes be less than the dividend on the preference share.

Stock: In order to meet the expenses of a certain plan, the Government of India sometimes raises a
load from the public at a certain fixed rate of interest. Bonds or promissory notes called stocks of a
fixed value are used for sale to the public.

Note:
(i) Income per share = Rate of dividend × Nominal value of 1 share.
(ii) Annual income = Income per share × Number of shares.
Nominal value of all the shares
(iii) Number of shares = Nominal value of one share
Market value of the shares (Investment) Total Dividend
= =
Market value of one share Dividend per share
Total income ×100
(iv) Rate of interest on the Invest (yield) = Total investment
(v) When stock/share is purchased, brokerage is added to cost price.
(vi) When stock/share is sold, brokerage is subtracted from selling price.
(vii) In most problems, Face value of a share is taken to be ₹ 100 unless specified.

Example: The price of a ₹ 10 share of a company is ₹ 13 and the company declares dividend of 12%.
Find
(i) How many shares can be purchased out of ₹ 2600?
(ii) The dividend.
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 Percentage

(iii) The rate of interest on the investment.

Solution:
2600
(i) Number of shares = 13
= 200
(ii) Nominal value of the shares = 10 × 200 = ₹ 2000
Dividend = 12% of 2000 = ₹ 240
240 3
(iii) Rate of interest = 2600 × 100 = 9 13 %

Example: If a person sells for ₹ 18 each, three hundred fifty ₹ 10 shares in a company which pays a
dividend of 8 percent and then invests the proceeds of his sale in the purchase of ₹ 5
shares in another company at ₹ 3.50 each, find what difference is made in his income if
1
the second company pays a dividend of 3 per cent.
2
Solution: Three hundred fifty ₹ 10 shares represent a capital of ₹ 3500.
8
∴ Dividend on ₹ 3500 × 100 = ₹ 280
The proceeds of this sale = ₹ 350 × 18 = ₹ 6300
1
∴ Number of ₹ 5 shares bought in the second Company = ₹ 6300 ÷ ₹ 3 2 = 1800
1800 shares represent a capital of ₹ 1800 × 5
1
3
Dividend in the second case = ₹ 1800 × 5 × 100
2
= ₹ 315
∴ Change in income = ₹ 315 – ₹ 280 = ₹ 35 increase.

Example: A man invested ₹ 9000 in 3% ₹ 100 stocks at ₹ 90. He sold the stocks when the price rise
to ₹ 95 and invested the sale proceeds in 4% ₹ 100 stocks By doing so, his income
increased by ₹ 80. At what price did he buy the later stock?
9000
Solution: Number of stocks purchased for ₹ 9000 = 90 = 100
Income from this stock = 3 × 100 = ₹ 300
∴ Income from second stock = ₹ (300 + 80) = ₹ 380
Sale proceeds of first stock = 100 × 95 = ₹ 9500
380×100
Amount of second stock = ₹ 4 = ₹ 9500

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