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Thursday 20 October 2011

Percentage

The fundamental concept to remember when performing calculations with percentages is that the percent symbol can be treated as being equivalent to the pure number constant 1 / 100 = 0.01 , for example 35% of 300 can be written as (35/100) × 300 = 105.
To find the percentage that a single unit represents out of a whole of N units, divide 100% by N. For instance, if you have 1250 apples, and you want to find out what percentage of these 1250 apples a single apple represents, 100%/1250 = (100/1250)% provides the answer of 0.08%. So, if you give away one apple, you have given away 0.08% of the apples you had. Then, if instead you give away 100 apples, you have given away 100 × 0.08% = 8% of your 1250 apples.
To calculate a percentage of a percentage, convert both percentages to fractions of 100, or to decimals, and multiply them. For example, 50% of 40% is:
(50/100) × (40/100) = 0.50 × 0.40 = 0.20 = 20/100 = 20%.
It is not correct to divide by 100 and use the percent sign at the same time. (E.g. 25% = 25/100 = 0.25, not 25% / 100, which actually is (25/100) / 100 = 0.0025.)
The easy way to calculate addition in percentage (discount 10% + 5%):
y = [(x1+x2) - (x1*x2)/100%]
For example, in a department store promotion "discount 10%+5%", the total discount is not 15%, but:
y = [(10% + 5%) − (10% * 5%) / 100%] = [15% − 0.5%] = 14.5%

[edit] Example problems

Whenever we talk about a percentage, it is important to specify what it is relative to, i.e. what is the total that corresponds to 100%. The following problem illustrates this point.
In a certain college 60% of all students are female, and 10% of all students are computer science majors. If 5% of female students are computer science majors, what percentage of computer science majors are female?
We are asked to compute the ratio of female computer science majors to all computer science majors. We know that 60% of all students are female, and among these 5% are computer science majors, so we conclude that (60/100) × (5/100) = 3/100 or 3% of all students are female computer science majors. Dividing this by the 10% of all students that are computer science majors, we arrive at the answer: 3%/10% = 30/100 or 30% of all computer science majors are female.
This example is closely related to the concept of conditional probability.
Here are other examples:
  1. What is 200% of 30?
    Answer: 200% \times 30 = \frac{200}{100} \times 30 = \frac{2}{1} \times 30 = 2 \times 30 = 60

  2. What is 13% of 98?
    Answer: 13% \times 98 = \frac{13}{100} \times 98 = \frac{13 \times 98}{100} = 12.74

  3. 60% of all university students are female. There are 2400 female students. How many students are in the university?
    Answer: 2400 = 60% \times n, therefore  n = \frac{2400}{ \tfrac{60}{100} } = \frac{2400 \times 100}{60} = 4000.

  4. There are 300 cats in the village, and 75 of them are black. What is the percentage of black cats in that village?
    Answer: 75 = n% \times 300 = \frac{n}{100} \times 300, so n = \frac{75}{300} \times 100 = 25 and therefore n% = 25%.

  5. The number of students at the university increased to 4620, compared to last year's 4125, an absolute increase of 495 students. What is the percentual increase?
    Answer: 495 = n% \times 4125 = \frac{n}{100} \times 4125, so n = \frac{495}{4125} \times 100 = 12, and therefore n% = 12%.

[edit] Percentage increase and decrease

Sometimes due to inconsistent usage, it is not always clear from the context what a percentage is relative to. When speaking of a "10% rise" or a "10% fall" in a quantity, the usual interpretation is that this is relative to the initial value of that quantity. For example, if an item is initially priced at $200 and the price rises 10% (an increase of $20), the new price will be $220. Note that this final price is 110% of the initial price (100% + 10% = 110%).
Some other examples of percent changes:
  • An increase of 100% in a quantity means that the final amount is 200% of the initial amount (100% of initial + 100% of increase = 200% of initial); in other words, the quantity has doubled.
  • An increase of 800% means the final amount is 9 times the original (100% + 800% = 900% = 9 times as large).
  • A decrease of 60% means the final amount is 40% of the original (100% − 60% = 40%).
  • A decrease of 100% means the final amount is zero (100% − 100% = 0%).
In general, a change of x percent in a quantity results in a final amount that is 100 + x percent of the original amount (equivalently, 1 + 0.01x times the original amount).
It is important to understand that percent changes, as they have been discussed here, do not add in the usual way, if applied sequentially. For example, if the 10% increase in price considered earlier (on the $200 item, raising its price to $220) is followed by a 10% decrease in the price (a decrease of $22), the final price will be $198, not the original price of $200. The reason for the apparent discrepancy is that the two percent changes (+10% and −10%) are measured relative to different quantities ($200 and $220, respectively), and thus do not "cancel out".
In general, if an increase of x percent is followed by a decrease of x percent, and the initial amount was p, the final amount is p((1 + 0.01x)(1 − 0.01x)) = p(1 − (0.01x)2); thus the net change is an overall decrease by x percent of x percent (the square of the original percent change when expressed as a decimal number). Thus, in the above example, after an increase and decrease of x = 10 percent, the final amount, $198, was 10% of 10%, or 1%, less than the initial amount of $200.
This can be expanded for a case where you do not have the same percent change. If the initial percent change is x and the second percent change is y, and the initial amount was p, then the final amount is p((1 + 0.01x)(1 + 0.01y)). To change the above example, after an increase of x = 10 and decrease of y = − 5 percent, the final amount, $209, is 4.5% more than the initial amount of $200.
In the case of interest rates, it is a common practice to state the percent change differently. If an interest rate rises from 10% to 15%, for example, it is typical to say, "The interest rate increased by 5%" — rather than by 50%, which would be correct when measured as a percentage of the initial rate (i.e., from 0.10 to 0.15 is an increase of 50%). Such ambiguity can be avoided by using the term "percentage points". In the previous example, the interest rate "increased by 5 percentage points" from 10% to 15%. If the rate then drops by 5 percentage points, it will return to the initial rate of 10%, as expected

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