What Are Percentages?
Let’s
start by figuring out what percentages actually are and where they come
from. It might not be obvious, but fractions and percentages are
inextricably linked. In fact, percentages are fractions! But they’re not just any old type of fraction—percentages are special: they’re fractions where thedenominator (the
bottom part) always has a value of 100. And since this denominator is
always the same, it doesn’t need to be written down. That’s why
percentages only have one number instead of two like normal fractions.
What Does “Percent” Mean?
Now,
let’s take a closer look to see where this all comes from. What does
“percent” actually mean? Well, let’s split it into two words and see if
the meaning becomes clearer: percent = “per cent.” That is the same
“cent” as in the word “century,” which means 100 years. So “per
cent” means “per 100,” or “for each 100.” What does something like 1
percent—or 1%—actually mean then? Well, 1% literally means 1 per 100.
Or, in fractional lingo: one one-hundredth—1/100.
How to Use Money to Understand Percentages
Here’s
an easy way to think about percentages: The US dollar (and many other
currencies around the world) is broken up into 100 parts—called cents!
(The use of the word “cent” here is no coincidence.) So, you can think
of percentages as portions of $1. For example: What’s 1% of $1? Well,
since 1% means 1/100 of something, and 1 cent is 1/100 of $1, 1% of $1
must be 1 cent. Okay, how about 10% of $1. Well, if 1% of $1 is 1 cent,
then 10% of $1 must be 10 times that. Which, of course, is 10 cents—also
known as a dime.
Okay,
so 10% means 10/100 in fractional terms, but we also just said that 10%
of $1 is a dime. But a dime, being worth 10 cents, is 1/10 of a dollar.
So, the fraction 10/100 must be equivalent to 1/10! This isn’t
surprising if you’re familiar with “reducing fractions to lowest
terms”—a topic which we’ll talk about in the future. But, for now, the important thing to remember is that 10% and 1/10 are the same fraction. Why is that important?
How to Easily Calculate Ten Percent
Because it leads us to the following quick and dirty tip: To find 10% of any number,
all you have to do is divide that number by 10. Here’s what I mean.
What’s 10% of $10? Well, $10 divided by 10 is $1. So 10% of $10 is $1.
How about 10% of $20? Again, $20 divided by 10 is $2. So 10% of $20 is
$2.
To find 10% of any number, just divide it by 10.
Here’s another quick and dirty tip to help you easily calculate 10% of any amount
of money. First, write the amount out with the decimal point and the
digits representing the number of cents—like you’d see on a cash
register. For example: $2.50 or $85.00. Now, to find 10% of that amount,
just move the decimal point one position to the left. (We’ll talk a lot
more about decimal numbers in the future, so don’t worry if you’re not
sure what the decimal point really means yet.) So, what’s 10% of $2.50?
Just move the decimal place one position to the left. The result is
$0.25, which is the same as 25 cents—or one quarter. What’s 10% of
$85.00? Again, move the decimal point one position to the left—the
result is $8.50.
How to Quickly and Easily Calculate Tips
But
why would any of this make you forget your tip-calculating app? Here’s
the answer. At restaurants in the US, it’s generally accepted that good
service warrants a tip between 15% and 20% of the bill. Let’s say your
bill is $34.00. How can you use the power of 10% to calculate the tip?
First, calculate 10% of the bill: moving the decimal point one position
to the left, 10% of $34.00 is $3.40. Now, if you want to tip 20%, just
double this amount since 20% = 10% + 10% (or twice that of 10%). So the
total tip would be 2 x $3.40 = $6.80.
If
you wanted to leave 15% instead, you could use the fact that 15% = 10% +
5%. So since you already know that 10% of $34.00 is $3.40, you can just
take half of that to figure out what 5% of $34.00 is—$3.40 / 2 = $1.70.
So a 15% tip would therefore be $3.40 + $1.70 = $5.10. It might take a
little practice at first, but soon you’ll find that the power of 10%
allows you to quickly and easily calculate tips entirely in your head.
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