Percentage and Interest

Percentage meaning lies with finding the value in 100, or other words percentage of a value represents the number or ratio which can be written as “a fraction of 100”. One needs to understand how to determine the percentage of a number which is an effective part of basic arithmetic. The concept of interest lies with the concept of lending money or can be the opposite. Whenever an amount of money is lent or borrowed, the amount which requires to be returned is calculated along with a particular value of interest applied to the whole amount. The concept of the percentage of interest can be related to every aspect of life.    

Discussion 

Concept of percentage and interest

A percentage is determined by dividing the given number by whole and then multiplying the answer by 100. The percentage is a dimensionless value that can be alternatively represented in the form of a fraction or decimal. Understanding by name, “per” represents “out of” and “cent” is for “hundred”. Interest is a monetary charge which is usually applied to the amount of borrowed money, and it is expressed in the terms of percentage. It is often seen that when an individual takes money from the bank, the amount which needs to be returned after several years is not the exact amount withdrawn. The amount gets increased with time, and the reason behind this lies with the concept of interest. A certain percentage of interest is applied to the overall amount. One has to daily with money almost every day, and it becomes essential for maintaining a balanced chequebook which can consist of daily expenses. One wants to make savings also need the basic concepts of arithmetic, especially that of interests. One can never find a bank that works without interests applied on the loan taken. There are two types of interest, one is simple interest and another one is compound. The formula for both is:

Simple Interest = P*R*T

Compound Interest = P(1+r/n)^ nt – P   

The concept of percentage and interest can be found in financial aspects of daily life, where one needs to take an account of statistics and media. According to the formula, one can easily understand that compound interest applies a huge interest rate on the overall value, whereas simple interest implies a comparatively lower value. 

Business ownership requires a deep knowledge of the basic arithmetic percentage and interest, to carry out profitable operations. Financial transactions along with accurate record-keeping are essential for enhancing the profit margin of a company. Hence resting product efficiently and pricing with its services is not what makes a business successful. It is often advised to an individual that if it does not have a strong grip of percentage and interest then getting established in this industry is a little tougher. 

Why percentages are so important in mathematics?

The most common application area of percentage is comparing between two quantities. It is found to be helpful when two different quantities are to be compared with the help of the percentage concept. Not only in mathematics, but it is also often found to be essential in geography, or issues in areas that are entirely different. Analyzing huge data within a short time period, while maintaining more accuracy, percentage helps in making calculations easier. In real-life examples, we can see that votes gained by each team are easier to be displayed in the form of percentages. The concept of percentage is essential in the business world and governmental departments. Discount stores, inflation rates, and several other media data are displayed with the help of a percentage value.  

Application of interest  

The main application of interest lies with borrowing or lending money, which provides one with an assumption of the exact amount to be paid after a period of time. Compound interest helps in enhancing wealth faster in comparison with simple interest. However, simple interest is more beneficial for those who borrow money, as simple interest keeps the overall interest rate on the overall value much lower, in this respect, if one looks at compound interest then it is more beneficial for lenders as it implies a huge interest rate on the total amount. Snowball effect can be created through compound interest which is due to the reason that original investment along with total income earned both increases altogether. Hence in other words one can relate it in a way that as much the investment amount gets increased more return is obtained after a specific time period.   

Conclusion 

It has been concluded that Percentage meaning can be defined as a part per hundred and the percentage of a number is represented by the symbol %. Application of percentage could be viewed extensively, as in every aspect of life one has to deal with percentage, whether it be comparing between two components, or which political party has got what percentage of votes and based on the value of percentage one is able to make a clear decision. Hence it becomes essential to get with the concepts of determining the percentage of a number. On the other hand, percentage and interest is a process that accounts for the amount of money that will get increased at the end of a certain period of time.