Percent ( % )
When we say “percent”, we are really saying “per 100”.
One percent (1%) means 1 per 100.
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Percentage Change (Increase / Decrease)
Steps to find percentage change
1. Find the difference between two numbers that you are comparing.
Increase = New number – Original number
Decrease = Original number – New number
2. Then divide the increase/decrease by original number.
3. Multiply the answer by 100.
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Applications of Percent
Who uses this?
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Sale representatives use percent to calculate their total pay.
What is a commission?
A commission is money paid to a person or a company for making a sale. Usually the commission is a
percent of the sale amount.
Example (1) Business Application
Ms. Barns earns a base salary of $42,000 plus a 1.5% commission on sales. Her total sales one year
were $700,000. Find her total pay for the year.
Total pay = base salary + commission
Total pay = $ 42,000 + 1.5% of $ 700,000
1.5
Total pay = 42,000 +( x 700,000)
100
Total pay = 42,000 + 10,500
Total pay = 52,500
Ms. Barns total pay was $ 52,500.
Exercise
1. A telemarketer earns $350 per week plus a 12% commission on sales. Find her total pay for a
week in which her sales are $ 940.
2. A sale representative earns a 2.5% of commission on sales. Find the commission earned when
the total sales are $ 80,700.
3. Karen earns a salary of $ 28,600 per year plus a 4.25% of commission on sales. Find her total
earnings for a year when her sales are $ 310,000.
Interest (r)
Interest is the amount of money charged for borrowing money, or the amount of money earned
when saving or investing money.
Principal (P)
Principal is the amount borrowed or invested.
Simple Interest (I)
Simple interest is the interest paid only on the principal.
I = Prt I= simple interest, P = principal, r = interest rate per year
as a decimal,
t = time in years
Example (2) Finance Application
A. Find the simple interest paid annually for 2 years on a $900 loan at 16% per year.
P = $900, r = 0.16, t = 2 years
I = Prt
I = 900 x 0.16 x 2
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I = 288
The amount of simple interest is $ 288.
B. After 3 months, the simple interest earned annually on an investment of $ 7000 was $ 63. Find
the interest rate.
P = $ 7000
I = $ 63
1 year 1
T = 3 months = 3 months x = year
12months 4
I = Prt
63
I 63× 4
r= = 1 =
Pt 7000× 7000
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r = 0.036
The interest rate is 3.6%.
Exercise
4. Find the simple interest earned after 2 years on an investment of $ 3000 at 4.5% interest earned
annually.
5. The simple interest paid on a loan after 6 months was $ 306. The annual interest rate was 8%.
Find the principal.
6. Find the amount of simple interest earned after 2 years on a $ 480 invested at a 7% annual
interest rate.
7. Find the number of years I would take for $ 1200 to earn simple interest of $ 324 at an annual
interest rate of 6% per year.
8. Find the total amount owned after 6 months on a loan of $ 900 at an annual simple interest rate
of 8.5%.
Tip
A tip is an amount of money added to a bill for service. It is usually a percent of the bill before sales
tax is added. Sales tax is a percent of an item’s cost.
Sales tax and tips are sometimes estimated instead of calculated exactly. When estimating percents,
use prcents that you can calculate mentally.
Find 10% of a number by moving the decimal point one place to the left.
Find 1% of a number by moving the decimal point two places to the left.
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Find 5% of a number by finding of 10% of the number.
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Example (3) Estimating with percents
A. The dinner check for Maria’s family is $67.95. Estimate a 15% of tip.
Step 1: First round $67.95 to $70.
Step 2: Think: 15% = 10% + 5%
Step 3: 10% of $70 = $7
5% of $70 = $3.5
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Step 4: 15% of $70 = $10.5
The tip should be about $10.5.
B. The sales tax rate is 6.25%. Estimate the sales tax on a shirt that costs $29.50.
Step 1: First round 6.25% to 6% and $29.50 to $30.
Step 2: Think: 6% = 6 (1%)
Step 3: 1% of $30 = $0.3
Step 4: 6% of $ 30 = 6 ($0.3) = $1.8
The sales tax is about $1.8.
Exercise
9. Estimate a 15% tip for $21.98.
10. Estimate the tax on shoes that cost $68.50 when the sales tax rate is 8.25%.
11. Estimate a 15% tip on a $42.65 check.
12. Estimate the tax on a $198 stereo when the sales tax is 5.25%.
Additional Exercises
1. A boat salesperson earns a 2.5% commission on the sale of each boat. Find the commission earned
on a boat that sells for $18,500.
2. A cell phone distributor earns a yearly salary of $28,000 plus a 17.5% commission on sales. Find the
total earnings for a year when the sales are $38,000.
3. Find the simple interest paid after 3 months on a loan of $9700 borrowed at an annual interest rate
of 11%.
4. After 8 months, $750 simple interest was owed on a loan of $9000. Find the annual interest rate.
5. How long will it take $680 to earn simple interest at an annual interest rate of 3%?
6. Estimate the tip on a $19.65 check using a tip rate of 15%.
7. Estimate the tax on tires that cost $498 with a 6.25% sales tax.
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