LESSON 1 – PERCENTAGE

Introduction

Percentages are like a secret code that helps us understand parts of a whole in a simple
way. In this lesson, we'll unlock the magic of percentages, figure out how to use them,
and see how they're super useful in real life. Whether you're shopping, saving, or
studying, percentages are your friends. So, let's dive into the world of percentages and
discover their power.

Percentage - Youtube

I. Definition and Basics of Percentage

1. Definition of Percentage:

Percentage is a term used to express a proportion or relative value as a fraction of 100.

The "%" sign is frequently used to denote it. Percentages are frequently used to compare
numbers or to depict elements of a total in a way that makes it simple to comprehend and
contrast various values.

2. Calculating Percentages:
In mathematics, a percentage is created by multiplying a fraction or ratio by 100 and then
adding the sign "%". The formula to determine a percentage is as follows:

Part
Percentage = x 100
Whole

Where:
"Percentage" is the value expressed as a percentage.
"Part" is the specific portion or fraction of the whole you are referring to.
"Whole" represents the entire quantity or total from which the part is derived.

3. Using Percentages in Everyday Life

Percentages are a fundamental part of our daily lives, and they find applications in
various real-world scenarios. Let's dive into some specific examples to illustrate how
percentages are used:

a. Sales and Discounts: Calculating discounts during sales or promotions.

- Example 1: Imagine you're shopping for a new laptop, and the store offers a 20%
discount on a $1,000 laptop. How much money will you save?
20
- Solution: Savings = x $1,000 = $200. You'll save $200 on the laptop.
100

b. Finance: Calculating interest rates, tax rates, and investment returns.

- Example 2: You deposit $5,000 in a savings account with an annual interest rate of
4%. How much interest will you earn after one year?
 4
- Solution: Interest Earned = x $5,000 = $200. You'll earn $200 in interest.
100

c. Statistics: Analyzing data and expressing proportions.

- Example 3: In a survey, 70 out of 100 respondents said they prefer online shopping.
What percentage of respondents prefers online shopping?
70
- Solution: Percentage = x 100% = 70%. 70% of respondents prefer online
100
shopping.

d. Health: Representing proportions in nutrition labels and medical statistics.

- Example 4: A nutrition label on a cereal box indicates that it contains 15% of the daily
recommended fiber intake per serving. If the daily recommended intake is 25 grams, how
many grams of fiber are in one serving?
15
- Solution: Fiber in one serving = x 25 grams = 3.75 grams. One serving contains
100
3.75 grams of fiber.

e. Education: Grading systems often use percentages to assess performance.

- Example 5: In a school, a student scores 85 out of 100 on a math exam. What is the
student's percentage score?
85
- Solution: Percentage Score = x 100% = 85%. The student scored 85%.
100

These examples showcase how percentages are used to calculate discounts, interest,
survey results, nutritional values, and exam scores. Percentages provide a clear and
standardized way to communicate and understand proportions and values in everyday
situations, making them an essential concept for practical decision-making.

II. Percentage Calculations

 1. Percentage Increase and Decrease:

Percentage increase and percentage decrease are used to express the change in a value
(usually a quantity or a number) as a percentage relative to its original value. They aid in
determining how much a value has increased or decreased from its starting point.
The formulas for percentage increases and decreases are as follows:

a. Percentage Increase
Percentage increase represents how much a value has gone up compared to its original
value. The formula is:

New Value−Old Value

Percentage Increase = x 100
Old Value

New Value: The updated or final value.

Old Value: The initial or original value.
b. Percentage Decrease
Percentage decrease represents how much a value has gone down compared to its original
value. The formula is similar:

Old Value−New Value

Percentage Decrease = x 100
Old Value

Old Value: The initial or original value.

New Value: The updated or final value.

Example 6:
You buy a smartphone for $400, and after a few months, its value decreases to $320.
Calculate the percentage decrease in the smartphone's value.

Solution 6:

Percentage Decrease = [(400 - 320) / 400] * 100

Percentage Decrease = (80 / 400) * 100

Percentage Decrease = 20%

2. Finding a Percentage of a Number:

To find a specific percentage of a number, you can use the formula:

Percentage
Percentage of a Number = x Number
100

Problem 7:

You want to tip 15% on a restaurant bill of $75. How much should you tip?

Solution 7:

15
Tip = x 75
100

Tip = 0.15 x 75

Tip = $11.25

III. Practical Applications of Percentages

 1. Finance and Investments:
Percentages are crucial in finance for calculating interest rates, returns on investments,
and understanding the impact of inflation.
Example: When applying for a loan, banks often express the interest rate as a percentage.
For instance, a 5% annual interest rate on a $10,000 loan means you'll pay an additional
$500 in interest each year.

2. Business and Economics:

Businesses use percentages to analyze profits, losses, market share, and pricing strategies.
Economists use percentages to study economic indicators such as inflation rates and
unemployment rates.
Example: In the business world, profit margins are often expressed as percentages. If a
business spends $800 to produce a product and sells it for $1,000, the profit margin is
25% ($200 profit as a percentage of the cost).

3. Statistics and Data Analysis:

Percentages are used to represent proportions, frequencies, and distributions in data
analysis and statistical reports.
Example: Statisticians use percentages to present survey results. If 60% of respondents
prefer product A over product B, this information provides valuable insights for decision-
making.
 4. Education and Grading:
Educational institutions use percentages to assess students' performance and determine
grades.
Example: Grading systems in education rely heavily on percentages. A score of 90 out of
100 on an exam corresponds to a grade of 90%, typically an A.

5. Health and Nutrition:

Nutrition labels on food products provide information about the percentage of daily
recommended values for nutrients.
Example: Food labels use percentages to indicate daily recommended values. If a cereal
contains 20% of the recommended daily fiber intake, consumers can easily gauge its
nutritional value.

IV. Common Misconceptions and Pitfalls

Understanding percentages is crucial, but it's equally important to be aware of common

misconceptions and potential pitfalls to avoid errors in calculations and interpretations.
Let's explore these in more detail:

1. Misinterpreting Percentages:
Misconception: Believing that a percentage increase or decrease is relative to the
original value. For example, assuming that a 50% increase doubles the value.

Pitfall: Failing to accurately assess the magnitude of changes. In reality, a 50% increase
means adding half of the original value, not doubling it.

Example: If a product's price increases by 50%, it means the new price is 150% of the
original price (100% + 50%), not 200%.

2. Rounding Errors:
Misconception: Rounding percentages without considering precision can lead to
inaccuracies. For instance, rounding 9.5% to 10% can distort calculations.

Pitfall: Inaccurate calculations and decisions based on rounded percentages.

Example: If you're calculating a 9.5% tax on a $100 item, rounding it to 10% will result
in an overestimate ($10 instead of $9.50).

3. Comparing Percentages:
Misconception: Comparing percentages without context can be misleading. A 10%
increase in profits may seem small, but it depends on the underlying values. It's
significant for a small business but minor for a larger one.

Pitfall: Drawing incorrect conclusions when comparing percentages without considering

the base values.

Example: A 10% increase in sales revenue for a small startup might be a more
substantial monetary gain than a 20% increase for a well-established corporation.

4. Compound Percentages:
Misconception: Misunderstanding compound percentages, where a percentage change is
applied to a result that has already undergone a previous percentage change.

Pitfall: Errors in financial planning and forecasting due to inaccurate calculations.

Example: If your savings account yields a 10% annual interest rate, and then an
additional 5% interest is earned on the total, it doesn't result in a 15% total interest rate
but approximately 15.5%.

5. Inverse Percentages:
Misconception: Assuming that the inverse of a percentage is the opposite percentage.
For instance, thinking that the inverse of a 20% discount is a 20% surcharge.
Pitfall: Misjudging financial implications, especially in pricing strategies.

Example: If a product has a 20% discount, the price is reduced to 80% of the original
price, not increased by 20%.

Understanding these misconceptions and pitfalls will help you use percentages
effectively, make informed decisions, and prevent errors in various real-world situations.
Being precise and considering context are key to mastering the use of percentages.

Practice

Problem 1: If a mobile phone originally costs $500 and is then discounted by 20%, what
will be its price?

Solution 1: To calculate the price after the discount, you multiply the original price by
(100% - 20%) = 80%. So, the price of the phone after the discount is $500 x 0.8 = $400.

Problem 2: If you take a test and score 75 out of 100, what percentage is your score?

Solution 2: To calculate the percentage score, you divide your score by the total points
75
and then multiply by 100%. So, your score is x 100% = 75%.
100
Problem 3: If a store has a sales target of $10,000 for this month and they have sold
$8,500; what percentage of the target have they achieved?

Solution 3: To calculate the percentage of the target achieved, you divide the amount
sold by the target and then multiply by 100%. So, the percentage achieved is

$ 8,500
x 100% = 85%.
$ 10,000

Problem 4: A store offers a 30% discount on a product and then increases the price by
40%. If the original price of the product is $100, what will be the price of the product
after the price increase?

Solution 4: To calculate the price of the product after the price increase, you first
calculate the price after the discount and then increase it.

30
Price after the discount = $100 x (1 - ) = $70.
100

40
Price after the price increase = $70 x (1 + ) = $98.
100

So, the price of the product after the price increase is $98.

Conclusion

Percentage is a fundamental mathematical concept with wide-ranging applications in our

daily lives. Understanding percentages empowers us to make informed decisions in
finance, business, statistics, education, health, and various other fields. By grasping the
basics of percentages and their calculations, you'll be better equipped to navigate the
world of numbers and percentages with confidence and accuracy.