Percentage
A fraction or ratio expressed as a number out of 100, denoted by the % symbol.
What You Need to Know
A percentage represents a portion of a whole as parts per hundred. The word "percent" literally means "per hundred." Percentages make it easy to compare proportions and calculate portions of amounts.
Basic Conversions:
- Decimal to Percentage: Multiply by 100 (0.25 = 25%)
- Percentage to Decimal: Divide by 100 (50% = 0.50)
- Fraction to Percentage: Divide and multiply by 100 (3/4 = 0.75 = 75%)
Common Financial Uses:
- Interest rates (APR, APY)
- Investment returns
- Tax rates
- Discounts and markups
- Tip calculations
- Savings rates
Quick Mental Math:
- 10%: Divide by 10 ($80 × 10% = $8)
- 20%: Double the 10% amount ($8 × 2 = $16)
- 15%: Add 10% + 5% ($8 + $4 = $12)
- 5%: Half of 10% ($8 ÷ 2 = $4)
Percentage Point vs. Percentage: A 2% interest rate increasing to 4% is a 2 percentage point increase, but a 100% relative increase.
Sources & References
This information is sourced from authoritative government and academic institutions:
- consumerfinance.gov
https://www.consumerfinance.gov/consumer-tools/educator-tools/youth-financial-education/
Related Calculators & Tools
Put your knowledge into action with these interactive tools:
Discount Calculator
Calculate sale prices, savings, and percentage discounts. Stack multiple discounts and see your total savings.
Tip Calculator
Calculate tips and split bills easily. Find the perfect tip amount based on service quality and split the total among multiple people.
Related Terms in Personal Finance
20/4/10 Rule
A conservative car buying guideline: 20% down payment, 4-year maximum loan, monthly payment ≤10% of gross income.
50/30/20 Rule
A budgeting guideline allocating 50% to needs, 30% to wants, and 20% to savings
Analysis Paralysis
Overthinking choices until you miss the window to act.
Automated Savings
Setting up automatic transfers so saving happens without willpower.
Behavioral Finance
The study of how emotions and mental shortcuts influence money decisions.
Budget
A spending plan that tracks income and expenses to ensure you're living within your means and working toward financial goals.