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Consumer Arithmetic: Concept of Percent
Consumer Arithmetic: Concept of Percent
CONSUMER ARITHMETIC
PERCENTAGES
To calculate 25% of 56, we express 25% as 25
Concept of percent hundredths and then multiply by 56.
25
´ 56 = 14
A percent is a fraction with a denominator of 100. 100
The word percent actually means ‘per hundred’ or
‘hundredths’. It is denoted by the symbol, %. Example 1
1
Fraction, decimals and percents are basically rational Calculate: a) 12 % of 128 b) 115% of 56?
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numbers expressed in different forms. It is often
convenient to make conversions among these forms. Solution
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a) b)
Percent to fraction 12.5 115
= ´ 128 = ´ 56
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A percent is really a fraction written in another form. 100 100
So we can think of 48% as 48 hundredths. We may, 1600 6440
= =
however, wish to reduce the fraction to its lowest 100 100
.
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terms where possible. = 16 = 64.4
48 12 164 41 16
48% = = 164% = = =1
100 25 100 25 25 Expressing one quantity as a percent of
Percent to decimal
at another
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In comparing two quantities, it is always necessary to
To convert a percent to a decimal, we express it as
identify the base of the comparison. It is helpful to
hundredths, then convert to decimal form by dividing
replace the word percent with fraction to identify the
s
the numerator by 100.
base of the comparison (whole).
23 159
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Fraction to percent
Solution
Since one whole is equal to 100%, we can convert In this case, the base or whole is 25. Expressing 15
any fraction to a percent by multiplying the fraction
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15
by 100%. as a fraction of 25, our result is . Converting
1 whole = 100% 25
1 15
´100% = 60%
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17
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1% of the quantity =
25 Example 7
28 A van, which cost $20 000, was later sold for $16
× 100
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100% of the quantity = 000. Find the percentage loss.
25
=112
Solution
.
Example 5 Loss = Cost price – Selling price
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If 115% of a quantity is 90, what is the quantity? = $20 000 - $16 000 = $4 000
Loss
Percentage Loss = ´ 100%
Solution Cost Price
115% º 90
Therefore, 1% º
90 at =
4 000
20000
´ 100%
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115 = 20%
90
And 100% º ´ 100 = 78.3
s
115 Discount
The quantity is therefore 78.3, correct to 1 decimal
as
If an article is sold for more than its cost, then it is Selling price = Marked price – Discount on the
sold at a profit. marked price
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If an article is sold for less than its cost, then it is sold Discounts can often be expressed as a percentage of
at a loss. the marked price.
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Loss = Cost price – Selling price An article is marked at $40 and sold for $36. What
percent discount was given?
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Solution Example 12
(i) The discount is 20% off the marked price of A car salesperson is paid 4% commission on the
$900 selling price of a vehicle. How much will she
20 receive if she sells a car for $20 000?
Discount = ´ $900 = $180
100
Solution
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(ii) Price the customer pays Commission
= Marked price – Discount 4
4% of $20 000 = ´ $20000 = $800
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= $900 - $180 100
= $720
Sales tax
.
Example 13
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Amanda receives 5% commission on her first
In most countries, customers are charged a sales tax
$5 000 in sales and 10 % on sales beyond $5 000.
or Value Added Tax (VAT) on goods purchased.
If her sales amounted to $13 000, what was her
This is expressed as a percentage of the selling price
of an item.
at commission?
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Example 10 Solution
A company sells a printer for $340. If the sales tax Commission on first $5 000 = 5% of $5 000 =
$250
s
in the country is 12%, how much will a customer
pay for a printer? Balance of sales = $13 000 − $5 000 = $8 000
as
100
The customer pays: Simple and Compound Interest
Marked Price + Tax = $340 + $40.80 = $380.80
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Since the original quantity or cost price was Calculating Simple Interest
increased by 15%, we can let the price before
VAT be represented as 100%. In calculating Simple Interest, the principal remains
constant over the period of the loan and the amount
115% º $125 of interest earned (or charged) remains the same each
$125 year. If the principal, P is invested at a rate of R%,
1% =
115 then the interest, I, for a period of one year will be:
$125 R
100% = ´ 100 = $108.70 I= ´P
115 100
Hence, the price of the item before VAT =
$108.70
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000 for 4 years, at a simple interest rate of 10% \ Balance at the end of the 2nd year = $ 1 100 + $
per annum. Hence, calculate the total amount to be 110 = $1 210
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repaid.
For the 3rd year:
Solution Principal = $1 210
.
PRT $5000 × 10 × 4 10
I= = = $2000 Interest = ´ $1210 = $121
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100 100 100
The total amount to be repaid = $5 000 + $2 000 = Balance at the end of the 3rd year
$7 000 =$1210 +$121 =$1321
$6000 ´ 100
R=
$40000 ´ 3 For a rate of R% per annum over a period of n years,
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R= 5% the formula is
n
æ R ö
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A = P ç1 + ÷
è 100 ø
Calculating Compound Interest
20
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Hence the value of the car after 2 years
= $108 000.00 - $10 800.00 Solution
= $97 200 10% of $4800 = $480
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Total paid in installments = Down-payment +
Example 18 Total Installments
Calculate the compound interest on $6 000 if Total in instalments = 12 ´ $364 = $4368.
.
Hence, the hire purchase price of the item is $480
hs
1
invested for 3 years at 7 % per annum. + $4368 = $4848
2
Solution
æ
A = P ç1 +
R ö
n
at RATIOS
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÷
è 100 ø Ratios are used to make quantitative comparisons
3
æ 7.5 ö between or among measures of the same kind.
= $6000 ç 1 + ÷
s
è 100 ø
= $7453.78 Definition and notation
as
depreciates by 10% each year. What is its expected The ratio a to b is written as a:b, read as a to b.
value after two (2) years? The ratio a to b to c is written as a:b:c, where a, b
and c represent the quantities.
Solution
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2
æ 10 ö
A = 1000 ç1 - ÷ 3. The order is important in a ratio.
è 100 ø 4. Ratios are expressed in its lowest terms.
By using a calculator, A = $810 5. We use only integer values in expressing
ratios.
Hire purchase
Sharing a quantity in a given ratio
Instead of taking a loan to buy an item, some
customers may buy directly from the company and To share a quantity in a ratio, say a:b, we first add a
pay on terms, that is, over a period of time. This type to b to determine the number of shares. Then, divide
of transaction is called hire purchase (HP). It allows the quantity by the number of shares to obtain the
the customer to acquire the item while still paying for size of one share. We can now calculate the value of
each share using multiplication as shown below.
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equate as follows: 6 mangoes will be sold for × 6 = $9.60
7 parts = 35 cm
Equivalent rates (or ratios) method
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1 part = (35 ÷ 7) cm = 5 cm
The shorter length = 3 parts = 3 ´ 5 cm = 15 cm
Proportions
.
Example 21
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Randy has 12 more CDs than Jackie. The ratio of Sometimes it is convenient to solve problems
the number of Randy’s CD to the number of involving rates and ratios by setting up a proportion.
Jackie’s CD’s is 5:1. How many CDs does Randy A proportion is a statement of equality between two
have?
Solution
at ratios or two rates.
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Since a rate (or ratio) involves two quantities, a pair
Randy has 4 more shares than Jackie. But, Randy of equivalent rates will involve four quantities. In
has 12 more CDs than Jackie. We can, therefore, solving for an unknown quantity, three out of these
s
equate as follows: four quantities are given, and we use the basic
as
increases.
km per 30 litres.
3. The speed of a vehicle is 80 km/hour or 80
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22
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Solution In indirect proportion as one quantity increases the
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Unitary method Using proportions other decreases or vice versa. In solving problems on
indirect proportion, we cannot use the cross-product
If 2 litres cost $5.40 2L 5L method. This method is based on the assumption that
.
Then 1 litre costs = as one quantity increases the other increases. In
$5.40 $ x
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$5.40 some situations, this is not the case. For example, an
= $2.70 2 ´ x = 5 ´ 5.40
2 increase in the number of employees in a factory will
5 ´ 5.40
And 5 litres will cost x= result in a decrease in time required to complete the
$2.70 × 5
= $13.50
2
= $13.50 at job. This is provided that the employees work at the
same rate.
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Problems of this nature are solved using the unitary
s
Example 23 method.
3 litres of paint cover 20 m2. How many litres of
as
3× 160
3 x=
× 160 litres 20 Indirect proportion is treated in more depth in the
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Example 24
Two quantities are in the ratio 8: 7. If the smaller
quantity is 35, what is the larger quantity?
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To convert from one currency to another, we can use When employees work beyond their normal schedule
any of the methods mentioned in the previous of hours than is expected, they are paid extra money
section. The unit rate method and cross product for doing so. Overtime pay is usually a higher rate
method are more popular when converting than the basic rate.
currencies.
The wages earned for working extra time is called
Example 26 overtime wages and the rate of pay is called
Water is leaking from a tank at the constant rate of overtime rate. The normal wages earned without
4 litres per minute. How long will it take to lose 32 overtime is called the basic rate of pay.
litres of water?
Overtime rates vary, it can be one-half times the
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basic rate of pay for overtime work or two times or
Solution more, depending on the company.
The rate at which water leaks = 4 l per minute
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Time taken to lose 4 l = 1 minute Example 28
1 A company pays a basic wage of $900.00 for a 40-
Time taken to lose 1 l = minute hour week. Overtime is paid at a time-and-a-half.
.
4
a) Calculate
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1
Time taken to lose 32 l = 32 ´ minutes i. The basic hourly rate.
4 ii. The overtime rate.
= 8 minutes
Distance 60km
= = = 2.5 hours = $22.50 ´ 1.5 = $ 33.75
Speed 24km/h
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Since the marathon is 60 km, Kerry still has to run: c) The total earnings of the worker
(60 - 50) =10 km. = $1 305. 00
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for use of additional units.
Example 29 Calculate:
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i. The number of units in kWh used by Mr
A company charges the following monthly rates
Sandy for the month.
for all local telephone calls.
ii. Mr Sandy’s bill, inclusive of VAT, for
.
First 15 calls or less 45 cents per call the month
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Remaining calls 30 cents per call
Solution
a) Calculate the total bill for each of the
i.
following customers.
Customer George, who made 12 local at (i) Number of units used = 6925 - 5833 = 1092
$491.40 + $73.71=$565.11
Solution
a)(i) George’s bill
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12 ´ 0.45 = $5.40
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