Review the key concepts, formulae, and examples before starting your quiz.
🔑Concepts
Percentages represent parts of a whole as a fraction of . Visually, this can be understood using a 'hundred square'—a grid where each small square equals . To convert any fraction to a percentage, you multiply the fraction by . For example, of a shape shaded is equivalent to .
Percentage change describes how much a value has increased or decreased relative to its original amount. This is often visualized using a bar model where the original value is a bar representing . An increase adds a smaller bar to the end, while a decrease shades out or removes a portion of the original bar. The new value is found by multiplying the original by a multiplier like for growth.
Profit and Loss are financial measures based on the Cost Price () and Selling Price (). On a horizontal number line where the is the starting point, a movement to the right (where ) represents a profit, while a movement to the left (where ) represents a loss. Profit and loss are usually expressed as a percentage of the original Cost Price.
Simple Interest is interest calculated only on the initial principal amount () for the entire duration. This results in the interest amount being the same every year. When plotted on a coordinate plane with 'Time' on the -axis and 'Total Amount' on the -axis, simple interest creates a straight, diagonal line (linear growth) starting from the principal value.
Compound Interest is interest calculated on the initial principal and also on the accumulated interest of previous periods. Visually, this creates a 'snowball effect' represented by an exponential curve on a graph. Unlike the straight line of simple interest, the compound interest curve gets steeper over time as the 'interest on interest' adds up.
Reverse Percentages involve finding the original value () after a percentage change has been applied. This can be visualized as a flowchart: Original Value [Multiply by Change Factor] New Value. To find the original, you work backward: New Value [Divide by Change Factor] Original Value. It is a common mistake to simply apply the percentage to the new value; you must always divide by the multiplier.
📐Formulae
💡Examples
Problem 1:
A retailer buys a smartphone for 520. Calculate the percentage profit.
Solution:
- Find the actual profit: \$520 - \400 = $120$.
- Use the percentage profit formula: .
- Substitute the values: .
- Simplify the fraction: .
Explanation:
To find percentage profit, we first determine the absolute gain in currency and then compare that gain to the original cost (the investment), not the selling price.
Problem 2:
Calculate the total amount in a bank account after 3 years if 4%$ per annum.
Solution:
- Identify the variables: , , .
- Use the compound interest formula: .
- Substitute the values: .
- Simplify the multiplier: .
- Calculate the power: .
- Multiply by the principal: .
- The total amount is .
Explanation:
Using the compound interest formula allows us to find the total final amount () directly. The multiplier represents the original plus interest added each year.