CHAPTER 2:

PERCENTAGE, RATIO, AND

PROPORTION
Lesson 1: Base, Rate, and
Percentage

Problems concerning commissions and

overrides, trade and sales discounts,
depreciation using periodic rates, analysis
of financial statements, and a lot more
business problems are solved with the use
of the basic formula showing the
relationship between the base, the
percentage, and the rate.
 Using our basic formula P=BR, we
substitute and see that our relationship and
solution are correct:

Example:
Assuming a delivery vehicle is depreciated
at the rate of 10% annually and it costs
P200,000.00. The yearly depreciation of the
vehicle will be P200,000.00 x 10% =
P20,000.00. The base here is the cost of
the vehicle, P 200,000.00, the rate is the
10%, and the percentage is the
P20,000.00
Base (B)
Refers
to that number of which a certain
number of hundredths is taken.
Rate (R)
Refers to the number of hundre
Percentage (P)
Is the part considered in its quantitative
relation to the whole. In other words, it is
the part of the whole and the number
being compared to another number
(base).
Example:
A company that made a net sales of P108,000.00
in 201B and a net sales of P90,000.00 in 201A. To
get the percent of increase in sales, we do the
following:

% of increase in sales= Sales in 201B- Sales in 201A

Sales in 201A
= P 108,000.00 – P 90,000.00
P 90,000.00
= P 18,000.00
P 90,000.00
= .20
= 20%
Here, our base (basis of comparison) is the net sales for
201A because this is the figure that we are comparing our
net sales for 201B. The difference between the net sales for
the two years, P 18,000.00, is our percentage. Our rate is
20%