Percentage

A percentage is a number or ratio which shows a fraction of 100. It is often denoted using the percentage sign " % ".

For example, 65 % is equal to \(\frac{60}{100}\) or 0.655.

Example:

60% of 2000

= \(\frac{60}{100}\) x Rs 2000

= Rs 1200

Percentage can be determined by the following ways:

Commission

The commission is meant to motivate sales person to sell more. Sales commission are paid to employee or companies that sell goods in stores or by calling on customers.

A commission is generally a percentage of the sales price of an item.

Example:

If a sales person receives 15% commission on his sales and sells Rs 5000 worth of merchandise, he would earn 15% of Rs 5000

\(\frac{15}{100}\)x Rs 5000

= Rs 750 ( commission)

Discount

There is discount in the sale or purchase of goods or services .The store will often sell items for a discounted sales price.

Example:

An item that originally cost Rs 500 may be discounted by 20% of Rs 500.

20% of Rs 500 = \(\frac{20}{100}\) x Rs 500

= Rs 100

Subtract the discount amount from the original price to finds the sales price.

Sales price = Original price - discount

= Rs 500 - Rs 100

= Rs 400

Income Tax

Income Tax is levied on the income of individuals by the government of the country. The Government will not charge tax in all the income it will charge above certain criteria.

Example:

Jos Magar's monthly salary is Rs 30,000. If 10% income tax is levied on the amount of Rs 100,000, how much income tax will he pay in a year?

Solution:

Monthly income = Rs 30,000

Yearly income = Rs 30,000 x 12 = Rs 360,000

Taxable income = Rs 360,000 - Rs100,000 = Rs 260,000

Income Tax = 10% of Rs 260,000 = \(\frac{10}{100}\) x Rs 260,000 = Rs 26,000

Value Added Tax (VAT)

Value added tax (VAT) is added to the price of most things we buy.

Example:

A car costs Rs 40,00,000 before VAT. Work out the cost of the VAT if it is charged at 25%.

Solution:

Cost of the car before Tax = Rs 40,00,000

VAT Rate = 25%

Now, VAT amount = 25% of Rs 40,00,000

= \(\frac{25}{100}\) x Rs 40,00,000

= Rs 10,00,000

Percent Change

Have a look at this formula.

Percent Change = \(\frac{Amount\;of\;change}{Original\;Value}\) x 100

Example:

The price of rice is increased from Rs 100 to Rs 120 per kg. By how much percentage has the price increased?

Solution:

Original Price = Rs 100

New Price = Rs 120

Percentage increase = \(\frac{Amount\;of\;change}{Original\;Value}\) x 100

=\(\frac{20} {100}\) x 100

= 20%