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11.4 Practical examples

11.4 Practical examples

Here are some real-life examples of uses of percentages.

t If you buy something and sell it, the di$erence between the two Profi t = sell for more than you buy.
Loss = sell for less than you buy.
prices is a profi t or a loss.
It is given as a percentage of the buying price.
If you buy something for $20 and sell it for $15 you make a loss of $5 or 25%.
t When you buy something you may be o$ered a discount.

!is is a reduction in the price. It is usually given as a percentage.
If the price is normally $20 and you get a 10% discount, you only pay $18.
t If a bank helps you to buy an item, you may have to pay back more than
you borrow. !is is the interest that the bank charges. It is given as a 3% of $20 000 is $600

percentage of the cost. If a car costs $20 000 and the rate of interest
is 3%, you will pay $20 600.
t If you buy something the price may include a tax. ! is is called a purchase tax. When you earn

money you may have to pay tax on what you earn. !is is called income tax.
Worked example 11.4

A man earns $45 000 in a year.
He can earn $16 000 without paying any tax. He pays 24% tax on anything above $16 000.
a Work out how much tax he pays.
b What percentage of his income does he pay in income tax?

a 45 000 – 16 000 = 29 000 This is his taxable income. He pays tax on this amount.
24% of 29 000 = 6960 That is 0.24 × 29 000
He pays $6960.
6960
b 45000 × 100 = 15.5% 45 000 = 100%. The answer is rounded to one decimal place.

) Exercise 11.4

1 A woman bought an old chair for $240. She sold it for $300. The percentage profi t is

Work out the percentage profit. a percentage of 240.
2 A man bought a car for $15 900. He sold it for $9500.
Work out the percentage loss.

3 A trader buys some goods for $820. When he sells them he makes a profit of 35%.

a Work out the profit, in dollars.
b Work out how much he sells them for.
4 A bottle of grape juice costs $6.50.
If you buy six bottles you can get 10% discount.
Work out how much you save if you buy six bottles.
5 A restaurant must add 15% tax to the price of a meal.
a Here are some bill totals before tax is added. Work out the bill after tax is added.
i $42.20 ii $19.50 iii $64.80
b The tax rate is increased to 17%. Work out how much extra tax must be paid in each case.

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