Business Applications of Percentages

1. Discount: how much the cost of something is reduced by. Eg. $10%$10% discount for $\$200$$200 means taking $10%\times\$200=\$20$10%×$200=$20 off the full price of $\$200$$200

2. Commission: how much money a salesperson earns. It is usually a percentage of how much they manage to sell. Eg. $50%$50% commission on $\$10$$10 worth of sales is $50%\times\$10=\$5$50%×$10=$5, which is how much the salesperson gets to keep.

3. Profit: if an item is sold for more than what it cost to make or obtain, you make a profit. So it is the difference between the selling price and the cost price. Eg. If I bought a bike for $\$10$$10 and sold it for $\$15$$15, my profit is $\$5$$5

4. Loss: if an item is sold for less than what it cost to make or obtain, you make a loss. So it is the difference between a product's sale price and buy price when the sale price is lower. Eg. If I bought a bike for $\$20$$20 and sold it for $\$18$$18, my loss is $\$2$$2

5. Stocks: a type of 'virtual' product which represents ownership of part of a company

6. Percentage profit/loss: the profit/loss as a percentage of the buying price. Eg. I bought a bike for $\$20$$20 and sold it for $\$22$$22, so my percentage profit is $\frac{22-20}{20}\times100%=\frac{2}{20}\times100%$22−2020​×100%=220​×100% = $10%$10%. A profit of $\$100$$100 sounds good, but is it really that great if the buying price was $\$100000$$100000?

7. Interest: if youhave savings in a bank account, or owe money in the form of loans, interest is the amount by which the savings or loans grow. Eg. If I have $\$500$$500 in the bank and the interest rate offered is $10%$10%, I will earn an extra $10%\times\$500=\$50$10%×$500=$50 worth of interest.