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How to Calculate Percentages

Percentages express a number as a fraction of 100. The word comes from the Latin "per centum" meaning "per hundred". Percentages are used everywhere in finance: interest rates, tax rates, discounts, investment returns, and inflation.

Common Percentage Formulas

X% of Y: Multiply Y by X/100. Example: 20% of 500 = 500 × 0.20 = 100.

Percentage change: (New − Old) / Old × 100. A positive result is an increase, negative is a decrease.

Reverse percentage: If 80 is 20% of something, the total is 80 ÷ 0.20 = 400.

Percentages in Finance

In finance, percentages appear in: interest rates (AER, APR), tax rates (20%, 40%, 45%), investment returns (% gain/loss), inflation (CPI %), and mortgage rates. Understanding percentage calculations helps you compare financial products accurately.