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YEAR 11 · INVESTING AND BORROWING · 20 MIN

Percentage/financial arithmetic

Calculate financial percentage changes and recover an original value.

In this lesson

Before you start
  • Percentage conversions
  • Decimal multiplication
01 / LEARN

Understand the idea.

Identify the whole

A percentage describes a part of a reference amount. Identify that reference before calculating: a discount uses the original price, while profit as a percentage of cost uses the cost. Convert the percentage to a decimal by dividing by 100.

An increase of decimal rate r multiplies the current amount by 1+r; a decrease multiplies it by 1−r. Keep fixed charges separate unless the question says the percentage also applies to those charges.

Reverse a change

To reverse a percentage change, divide by the factor that produced the final value. After a 15% discount, the final price is 0.85 times the original. Dividing by 0.85 recovers the original; adding 15% to the discounted amount does not.

Successive changes act on successive amounts, so multiply their factors in order. Estimate whether the answer should be larger or smaller before using a calculator, keep intermediate values unrounded, and round the final monetary result to cents.

02 / WORKED EXAMPLES

See the method in action.

EXAMPLE 01

Worked example

A bicycle costs AUD 240 before a 12.5% discount. Delivery adds AUD 18. Find the total.

Worked solution

  1. 1

    Write the discount factor.

    1−12.5100=0.875

    A 12.5% discount leaves 87.5% of the original bicycle price.

  2. 2

    Calculate the discounted price.

    Cbicycle=240⁢(0.875)=AUD 210.00

    The discount applies to the bicycle's stated original price.

  3. 3

    Add the delivery charge.

    Ctotal=210+18=AUD 228.00

    Delivery is an additional fixed charge, not another amount to discount.

Answer

AUD 228.00

EXAMPLE 02

Worked example

A yearly fee is AUD 378 after an 8% increase. Find its previous value.

Worked solution

  1. 1

    Relate the previous fee to the increased fee.

    1.08⁢P=378

    An 8% increase makes the new fee 108% of the previous fee.

  2. 2

    Reverse the increase by division.

    P=3781.08=AUD 350.00

    Dividing by the growth factor isolates the original amount.

  3. 3

    Check using the original reference amount.

    350+0.08⁢(350)=350+28=378

    The proposed previous fee produces the stated increased fee.

Answer

AUD 350.00

03 / YOUR TURN

Try it yourself.

Check your understanding

Find 7.5% of AUD 640.

Show answer & reasoning

AUD 48.00

Use AUD 640 as the reference amount and convert 7.5⁢% to 0.075. Then 0.075⁢(640)=AUD 48.00.

Keep practising

6 worksheet questions · 12 marks

Read the questions online
  1. Find 6% of AUD 850.
    2 marks
  2. Reduce AUD 96 by 15%.
    2 marks
  3. A bill rises from AUD 125 to AUD 140. Find its percentage increase.
    2 marks
  4. A jacket costs AUD 108 after a 25% discount. Find the original price.
    2 marks
  5. AUD 500 increases 10%, then decreases 10%. Find the final value and overall change.
    2 marks
  6. Add 8% tax to a tax-exclusive price of AUD 225. Find tax and total.
    2 marks
Read the worked solutions

Equivalent correct methods earn the corresponding marks. Include units where asked.

  1. Find 6% of AUD 850.
    2 marks

    0.06×850=51.

    AUD 51.00
  2. Reduce AUD 96 by 15%.
    2 marks

    96×0.85=81.60.

    AUD 81.60
  3. A bill rises from AUD 125 to AUD 140. Find its percentage increase.
    2 marks

    Change=15.

    15125×100=12⁢%.

    12%
  4. A jacket costs AUD 108 after a 25% discount. Find the original price.
    2 marks

    0.75⁢P=108.

    P=144.

    AUD 144.00
  5. AUD 500 increases 10%, then decreases 10%. Find the final value and overall change.
    2 marks

    500×1.1×0.9=495.

    5500=0.01.

    AUD 495.00;1% decrease
  6. Add 8% tax to a tax-exclusive price of AUD 225. Find tax and total.
    2 marks

    0.08×225=18.

    225+18=243.

    AUD 18 tax; AUD 243 total
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Curriculum reference & lesson scope

SACE Board of South Australia

Stage 1 General Mathematics: investing and borrowing. Supplied educational models cover interest, investment comparisons, shares and credit; they are not recommendations of real products or statements of personal tax liability.

Official curriculum source ↗

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