For example, a stall owner buys a load of toasters in bulk. He sells them at £24 after increasing the price by 20%. What was the cost price?
We say the cost price is 100%. The selling price was the cost price plus 20% which is then 120%
The selling price is £24.
So, now you need to figure out what 100% is, if 120% is £24.
First of all work out 1%:
120% = £24
1% = £24/120 = £0.2
The cost price is 100% so now you need to multiply your answer by 100:
Cost price = 0.2 x 100 = £20
Second example: a man has a bed that he wants to sell over an online auction site. He sells it at 20% of its original value at £145. What did he originally buy the bed for?
The original price is 100%.
Second hand = 20% = £145
1% = £145 ÷ 20%
100% = 100 x 1% = 100 x (145 ÷ 20) = £725
For example, let’s say you borrowed £600 for 4 years but this time from a bank that charged you 6% compound interest per year.
You start with £600 in your 1st year. This is your principal.
Interest your 1st year is 6/100 x 600 = £36
Principal after your 1st year = £636
Interest in your second year = 6/100 x 636 = 38.16
Principal after the 2nd year = 674.16
Then, interest in the 3rd year = 6/100 x 674.16 = 40.4496
So, principal after the 3rd year would be = 714. 6096 = 714.6
That means that the total interest charge is approximately £114.61
In your exam you might be asked to do one of the following:
- - find the percentage of an amount
- - find out the percentage when given two amounts
- - find out a percentage increase or decrease
- - find the cumulative change
Always make sure you read the question carefully so you know what you’re being asked.