Example: If a bank account pays 2% interest per year, then £1000 will grow by £20 to £1020 within a year. If that £1020 is left in the account for a second year, the balance will increase by 2% of £1020, not 2% of the original £1000. So the interest added in the second year will be slightly higher than in the first. It will be £20.40, giving a balance at the end of the second year of £1040.40.
Key ideas
In any calculation involving a percentage increase or decrease, the original quantity is \(100\%\).
We need to be able to write percentages as decimals: eg. \(95\%=0.95\), \(103\%=1.03\), \(120\%=1.2\).
An awkward looking equation like \(0.98x=294\) isn't actually much harder than \(2x=10\). We still divide.
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Example 1 (non-calculator)
SQA National 5 Maths 2014 P1 Q9
480 000 tickets were sold for a tennis tournament last year. This represents 80% of all the available tickets. Calculate the total number of tickets that were available for this tournament.
In this 3-mark question, we were told that \(80\%\) of the total equals \(480\,000\small.\)
Probably the simplest way to work out what \(100\%\) equals is to lay our working out as follows.
As this is a Paper 1 (non-calculator) question, we need to think of an "easy" number that is a factor of both \(80\) and \(100\small.\) There are two good options that keep the arithmetic simple: \(10\) or \(20\small.\)
We will use \(20\%\) for the middle step. As an exercise, you might like to try the question again for yourself, but using \(10\%\) instead.
So the total number of available tickets was \(600\,000\small.\)
Example 2 (non-calculator)
SQA National 5 Maths 2021 P1 Q12
A band sold 2400 tickets for their gig in Edinburgh. This was 75% of the number of tickets sold for their gig in Glasgow. Calculator the number of tickets sold for their gig in Glasgow.
This 3-mark non-calculator question is very similar to example 1 above.
The best common factor of \(75\) and \(100\) to use for the middle step is \(25\small.\) To keep the arithmetic as simple as possible, we should usually try to think of the highest common factor.
So the band sold \(3200\) tickets for their Glasgow gig.
Example 3 (non-calculator)
In a 20% sale, a pair of jeans is priced at £48. What was the original price?
This is a reverse percentage question.
We think of the original price as \(100\%\).
So the sale price is \(100\%-20\%=80\%\) of the original price.
Method 1:
Create an equation. Let's use \(x\) for the original price.
$$
\begin{eqnarray}
\small\textsf{sale price}\normalsize &=& 80\% \small\textsf{ of original price}\normalsize \\[6pt]
48 &=& 0.8x \\[6pt]
x &=& \frac{48}{0.8} \\[6pt]
x &=& \frac{480}{8}\:\small\textsf{ (x10 top and bottom)}\normalsize \\[6pt]
x &=& 60
\end{eqnarray}
$$
So the original price was £60.
Method 2:
This method doesn't use algebra. Some people find it easier.
Because this is a non-calculator question, we don't use 1% for the middle step. Instead, we choose a nice, round number that is a factor of both 80 and 100. We used 10%, but 20% would also work well.
$$
\begin{eqnarray}
80\%\ \small\textsf{of the original price}\normalsize &=& £48 \\[6pt]
\small\div\textsf{8} &\ & \small \div \textsf{8} \normalsize\\[6pt]
10\%\ \small\textsf{of the original price}\normalsize &=& £6 \\[6pt]
\small \times \textsf{10} &\ & \small \times \textsf{10} \normalsize\\[6pt]
100\%\ \small\textsf{of the original price}\normalsize &=& £60 \\[6pt]
\end{eqnarray}
$$
After a marketing campaign, the number of clients that an accountancy firm serves rises 15% to 161. How many clients had they before their campaign?
Again, we think of the original number as \(100\%\).
This has increased by \(15\%\), so it's now \(100\%+15\%=115\%\) of the original number.
Method 1:
Create an equation. Let's use \(x\) for the original number.
$$
\begin{eqnarray}
\small\textsf{new number}\normalsize &=& 115\% \small\textsf{ of original number}\normalsize \\[6pt]
161 &=& 1.15x \\[6pt]
x &=& \frac{161}{1.15} \:\small\textsf{ (not suitable for Paper 1)}\normalsize \\[6pt]
x &=& 140
\end{eqnarray}
$$
So the firm had 140 clients before their marketing campaign.
Method 2:
$$
\begin{eqnarray}
115\%\ \small\textsf{of the original number}\normalsize &=& 161 \\[6pt]
\small\div\textsf{115} &\ & \small \div \textsf{115} \normalsize\\[6pt]
1\%\ \small\textsf{of the original number}\normalsize &=& 1.4 \\[6pt]
\small \times \textsf{100} &\ & \small \times \textsf{100} \normalsize\\[6pt]
100\%\ \small\textsf{of the original number}\normalsize &=& 140 \\[6pt]
\end{eqnarray}
$$
Example 5 (calculator)
SQA National 5 Maths 2023 P2 Q6
Nadim bought a flat last year. The value of the flat has increased by 8% and it is now worth £94,500. Calculate how much Nadim paid for the flat.
As always, we think of the original value as \(100\%\).
This has increased by \(8\%\), so it's now \(100\%+8\%=108\%\) of the original value.
Method 1:
Create an equation. Let's use \(x\) for the original number.
$$
\begin{eqnarray}
\small\textsf{new value}\normalsize &=& 108\% \small\textsf{ of original value}\normalsize \\[6pt]
94\,500 &=& 1.08x \\[6pt]
x &=& \frac{94\,500}{1.08} \:\small\textsf{ (not suitable for Paper 1)}\normalsize \\[6pt]
x &=& 87\,500
\end{eqnarray}
$$
So Nadim paid £87 500 for his flat.
Method 2:
$$
\begin{eqnarray}
108\%\ \small\textsf{of the original value}\normalsize &=& £94\,500 \\[6pt]
\small\div\textsf{108} &\ & \small \div \textsf{108} \normalsize\\[6pt]
1\%\ \small\textsf{of the original value}\normalsize &=& £875 \\[6pt]
\small \times \textsf{100} &\ & \small \times \textsf{100} \normalsize\\[6pt]
100\%\ \small\textsf{of the original value}\normalsize &=& £87\,500\\[6pt]
\end{eqnarray}
$$
Example 6 (calculator)
A bank offers a fixed-rate savings account in which the saver must "lock away" their money for three years at an annual interest rate of 2.5%. If I save £20 000, how much interest will I earn in total?
For a \(2.5\%\) annual increase, we multiply by \(100\%+2.5\%=102.5\%\)
As a decimal, \(102.5\%=102.5 \div 100=1.025\)
So the final balance will be \( 20\small\ \normalsize 000\times 1.025^3 = £21\small\ \normalsize 537.81\)
The question asks for the interest, so this is \(£21\small\ \normalsize 537.81-£20\small\ \normalsize 000=£1537.81\)
A new car costs £25 000 and is projected to lose 15% of its value for each of its first four years. What will be its value after four years, correct to 3 significant figures?
For a \(15\%\) annual decrease, we multiply by \(100\%-15\%=85\%=0.85\)
So the value after four years will be \( 25\small\ \normalsize 000\times 0.85^4 = £13\small\ \normalsize 050.15\)
There are 964 pupils on the roll of Aberleven High School. It is forecast that the roll will decrease by 15% per year. What will be the expected roll after 3 years? Give your answer to the nearest ten.
\(15\%\) decrease: \(100\%-15\%=85\%=0.85\)
So the number after three years will be \( 964\times 0.85^3 = 592.0165\)
Rounded to the nearest \(10\small,\) this is \(590\) pupils.
Example 9 (calculator)
SQA National 5 Maths 2019 P2 Q1
A charity distributed 80 000 emergency packages during 2018. This number is expected to increase by 15% each year. Calculate how many emergency packages the charity expects to distribute in 2021.
\(15\%\) increase: \(100\%+15\%=115\%=1.15\)
So the number after three years will be \( 80\small\ \normalsize 000\times 1.15^3 = 121\small\ \normalsize 670\)
A housing development is being built. The price of a house built in 2020 is £250 000. This price is expected to increase by 4% each year. Calculate the expected price of a house built in 2022.
\(4\%\) increase: \(100\%+4\%=104\%=1.04\)
So the value after two years will be \( 250\small\ \normalsize 000\times 1.04^2 = £270\small\ \normalsize 400\)
Example 11 (non-calculator)
SQA National 5 Maths 2022 P1 Q10
Tommy buys flower seeds from a website. Tommy is given 30% discount. He pays £16.10 for the seeds. Calculate the cost of the flower seeds without the discount.
We think of the original price as \(100\%\).
So the discounted price is \(100\%-30\%=70\%\) of the price before discount.
Method 1:
Create an equation. Let's use \(x\) for the original price.
$$
\begin{eqnarray}
\small\textsf{discounted price}\normalsize &=& 70\% \small\textsf{ of original price}\normalsize \\[6pt]
16.10 &=& 0.7x \\[6pt]
x &=& \frac{16.1}{0.7} \\[6pt]
x &=& \frac{161}{7}\:\small\textsf{ (x10 top and bottom)}\normalsize \\[6pt]
x &=& 23
\end{eqnarray}
$$
So the original price was £23.
Method 2:
This method is more commonly used than the first.
10 is a nice, round number that is a factor of both 70 and 100, so let's use 10% for the middle step.
$$
\begin{eqnarray}
70\%\ \small\textsf{of the original price}\normalsize &=& £16.10 \\[6pt]
\small\div\textsf{7} &\ & \small \div \textsf{7} \normalsize\\[6pt]
10\%\ \small\textsf{of the original price}\normalsize &=& £2.30 \\[6pt]
\small \times \textsf{10} &\ & \small \times \textsf{10} \normalsize\\[6pt]
100\%\ \small\textsf{of the original price}\normalsize &=& £23 \\[6pt]
\end{eqnarray}
$$
Example 12 (calculator)
SQA National 5 Maths 2023 P2 Q1
A caravan was bought for £20,000. It depreciated by 11% in the first year. It then depreciated by a further 6% each year over the next two years. Calculate the value of the caravan three years after it was bought.
\(11\%\) depreciation: \(100\%-11\%=89\%=0.89\)
\(6\%\) depreciation: \(100\%-6\%=94\%=0.94\)
So the value after three years will be \( 20\small\ \normalsize 000\times 0.89\times 0.94^2 = £15\small\ \normalsize 728.08\)
Note: This is a silly level of accuracy, but the question didn't tell us to round it, so we should leave it as it is.
Example 13 (calculator)
SQA National 5 Maths 2024 P2 Q1
Dougie pays £460 for a new laptop. It is expected that the value of the laptop will depreciate by 26% each year. Calculate the expected value of Dougie's laptop after 3 years.
\(26\%\) decrease: \(100\%-26\%=74\%=0.74\)
So the value after three years will be \( 460\times 0.74^3 = £186.40\small,\) rounded to the nearest penny.
Example 14 (calculator)
SQA National 5 Maths 2024 P2 Q5
This year the cost of Charley's car insurance is £278.40. This is an increase of 16% on last year's cost. Calculate the cost of Charley's insurance last year.
We think of the cost last year as \(100\%\).
This has increased by \(16\%\), so it's now \(100\%+16\%=116\%\) of last year's cost.
Method 1:
Create an equation. Let's use \(x\) for the original cost.
$$
\begin{eqnarray}
\small\textsf{new cost}\normalsize &=& 116\% \small\textsf{ of original cost}\normalsize \\[6pt]
278.40 &=& 1.16x \\[6pt]
x &=& \frac{278.40}{1.16}\normalsize \\[6pt]
x &=& 240
\end{eqnarray}
$$
So Charley's car insurance cost £240.00 last year.
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