Understanding Percentages
A percentage is a number expressed as a fraction of 100. The symbol % means "out of 100." For example: - 25% means 25 out of 100, or one-quarter - 50% means 50 out of 100, or one-half - 100% means the whole amount
Three ways to use percentages
1. What is X% of Y?
Example: What is 20% of $500? - 20% of $500 = 0.20 × $500 = $100
Real-world use cases: - Calculating tips (20% of restaurant bill) - Finding a discount (30% off a price) - Determining tax (7% sales tax on a purchase) - Commission calculations (5% of sales revenue)
2. X is what % of Y?
Example: $25 is what % of $200? - ($25 / $200) × 100 = 12.5%
Real-world use cases: - Test scores (you scored 85 out of 100 questions correct = 85%) - Budget tracking (you spent $150 of a $500 monthly budget = 30%) - Market share (your company earned $10M of a $50M market = 20%) - Progress tracking (you completed 8 of 10 tasks = 80%)
3. % change from X to Y
Example: A stock price rose from $50 to $60. What is the % change? - (($60 - $50) / $50) × 100 = 20% increase
Real-world use cases: - Stock performance (price went up 15%) - Inflation (prices rose 3% year-over-year) - Population growth (city population increased 5%) - Salary raises (your pay increased 8%)
Key formulas
% of: result = (X / 100) × Y X is what % of Y: result = (X / Y) × 100 % change: result = ((New − Old) / |Old|) × 100
Common mistakes to avoid
1. Confusing the base. In "20% of $500," the base is $500 (the total). Don't reverse it to "$500 of 20%." 2. Forgetting to multiply by 100. If you calculate (X / Y), you get a decimal. Multiply by 100 to convert to a percentage. 3. Wrong direction on % change. Always subtract the old value from the new value, then divide by the old value (the denominator matters). 4. Percentage points vs. percent. If unemployment rises from 4% to 5%, that is a 1 percentage point increase, or a 25% relative increase. Don't mix these up.
Examples
| Question | Calculation | Answer | |----------|-------------|---------| | What is 15% of $200? | (15 / 100) × 200 | $30 | | 30 is what % of 150? | (30 / 150) × 100 | 20% | | % change from 80 to 100? | ((100 − 80) / 80) × 100 | +25% | | % change from 100 to 80? | ((80 − 100) / 100) × 100 | −20% | | What is 0.5% of $5,000? | (0.5 / 100) × 5000 | $25 |