{"id":552,"date":"2012-02-02T14:40:20","date_gmt":"2012-02-02T22:40:20","guid":{"rendered":"https:\/\/magoosh.com\/gmat\/?p=552"},"modified":"2020-01-15T10:50:58","modified_gmt":"2020-01-15T18:50:58","slug":"understanding-percents-on-the-gmat","status":"publish","type":"post","link":"https:\/\/magoosh.com\/gmat\/understanding-percents-on-the-gmat\/","title":{"rendered":"Understanding Percents on the GMAT"},"content":{"rendered":"

Here are five quick tips to make you much more effective at interpreting and solving GMAT problems involving percents, one of the most common GMAT questions<\/a>.<\/p>\n

 <\/p>\n

Percents and Decimals<\/h2>\n

Fundamentally, a percent is a fraction out of 100 \u2013 it is per centum<\/em> (Latin for “per 100”).\u00a0 It’s easy to change a percent to a decimal.\u00a0 For example, 37% means 37 parts out of one hundred, or 37\/100.\u00a0 As a decimal, that’s just 0.37.\u00a0 Changing a percent to a decimal simply involves sliding the decimal to the left two places.<\/p>\n

 <\/p>\n

Percent Changes as Multipliers<\/h2>\n

This is one of the BIG<\/strong> math ideas for GMAT.\u00a0 A multiplier<\/span> is a factor by which you multiply a number to get a desired result. There are three percent-related multipliers you will need to understand<\/p>\n

a) X% of<\/span> a number<\/strong><\/p>\n

Suppose I have $400 in an account, and need to know what 30% of this account is.\u00a0 The multiplier = the percent as a decimal.\u00a0 30% as a decimal is 0.30, and $400(0.30) = $120, so $120 is 30% of $400.<\/p>\n

b) an X% increase<\/strong><\/p>\n

Suppose I have $400 in an account, over time period, I am going to get an additional 5% of interest; in other word, my account is going to increase by 5%.\u00a0 Here, the multiplier = 1 + (the percent as a decimal)<\/strong>.\u00a0 Thus, $400(1.05) = $420, so that’s the amount I would have after a 5% increase<\/p>\n

c) an X% decrease<\/strong><\/p>\n

Suppose I have $400 in an account, and because of some kind of penalty, I am going to be nailed with a 15% deduction; in other words, my account will decrease by 15%.\u00a0 Here, the multiplier = 1 \u2013 (the percent as a decimal)<\/strong>.\u00a0 In this case, the multiplier = 1 \u2013 0.15 = 0.85, and the result after the deduction is ($400)(0.85) = $340.<\/p>\n

Calculating a percent change<\/h2>\n

Basically, a percent is a simple \"part\/whole\" ratio times 100.\u00a0 The GMAT will ask you to calculate percent changes, and here you have to be very careful with order, i.e., what’s the starting number and what’s the ending number.\u00a0 IMPORTANT: in a percent change, the starting number is always 100%<\/em>.\u00a0 Thus, we can say:<\/p>\n

 <\/p>\n

\"percent<\/p>\n

 <\/p>\n

Here are a couple examples<\/p>\n

a) Price increases from $400 to $500; find the percentage increase. <\/em><\/p>\n

Of course, that’s a change of $100, so $100 divided by starting value of $400 is 0.25, times 100 is 25%.\u00a0 A move from $400 to $500 is a 25% increase.<\/p>\n

b) Price decreases from $500 to $400; find the percentage decrease.<\/em><\/p>\n

Change is still $100, but now the starting value is $500, and $100\/$500 = 0.20, times 100 is 20%.\u00a0 A move from $500 to $400 is a 20% decrease.<\/p>\n

BIG IDEA<\/strong>: Order matters.\u00a0 When you change from one value to another and want the percentage change, it matters which value was the starting value.<\/p>\n

 <\/p>\n

A Series of Percentage Changes<\/h2>\n

Example: “Profits increased by 40% in January, then decreased by 30% in February, then increased by 20% in March.\u00a0 Express the change over the entire first quarter as a single percentage.”\u00a0 This may seem like a nightmare problem, but it’s quite approachable with multipliers.\u00a0 First Caution: NEVER<\/em><\/strong> add a series of percent<\/em>.\u00a0 That’s what many people will do, and on multiple choice, it’s always an answer choice \u2013 here, that would be 40 \u2013 30 + 20 = 30.\u00a0 That is not<\/strong> the way to go about answering the question.<\/p>\n

The way to attack this question is with a series of multipliers:<\/p>\n

In January, a 40% increase –> multiplier = 1.40<\/p>\n

In February, a 30% decrease –> multiplier = 0.70<\/p>\n

In March, a 20% increase –> multiplier = 1.20<\/p>\n

Aggregate change = (1.40)(0.70)(1.20) = 1.176 –> that’s a 17.6% increase for the quarter.<\/p>\n

BIG IDEA<\/strong>: For a series of percentage changes, simply multiply the respective multipliers.<\/p>\n

 <\/p>\n

The Increase \u2013 Decrease Trap<\/h2>\n

This is a predictable GMAT Math trap: the result of a percentage increase, followed by a percentage decrease of the same numerical value.\u00a0 For example, “The price of the appliance increase 20%, and then decreased 20%.\u00a0 The final price is what percent of the original price.”\u00a0 Every single time that question is asked on multiple choice, the incorrect answer of 100% will be an answer choice, and every single time, a large portion of folks who take the GMAT will select it.\u00a0 You have a leg up if you simply recognize and remember that this is a trap.<\/p>\n

In fact, solving this problem is just an extension of the previous item:<\/p>\n

a 20% increase –> multiplier = 1.20<\/p>\n

a 20% decrease –> multiplier = 0.80<\/p>\n

total change = (1.20)(0.80) = 0.96<\/p>\n

Thus, after the increase and decrease, the final price is 96% of the original price, which means it is a 4% decrease<\/em>.<\/p>\n

BIG IDEA #1<\/strong>: when you go up by a percent, then down by the same percent, you do not<\/span><\/em> wind up where you started: that’s the trap.<\/p>\n

BIG IDEA #2<\/strong>: in this situation, as in any situation in which you have a series of percentage changes, simply multiply the respective multipliers.<\/p>\n

 <\/p>\n

If you simply remain clear on these five tips, you will be a master of percent & percentage change, one of the most frequently asked topics on GMAT Math.<\/p>\n

Special Note:<\/h4>\n

To find out where percents sit in the “big picture” of GMAT Quant, and what other Quant concepts you should study, check out our post entitled:<\/p>\n

What Kind of Math is on the GMAT? Breakdown of Quant Concepts by Frequency<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Here are five quick tips to make you much more effective at interpreting and solving GMAT problems involving percents, one of the most common GMAT questions.   Percents and Decimals Fundamentally, a percent is a fraction out of 100 \u2013 it is per centum (Latin for “per 100”).\u00a0 It’s easy to change a percent to […]<\/p>\n","protected":false},"author":26,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[112],"tags":[],"ppma_author":[13209],"class_list":["post-552","post","type-post","status-publish","format-standard","hentry","category-math"],"acf":[],"yoast_head":"\nUnderstanding Percents on the GMAT - Magoosh Blog \u2014 GMAT\u00ae Exam<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/magoosh.com\/gmat\/understanding-percents-on-the-gmat\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Understanding Percents on the GMAT\" \/>\n<meta property=\"og:description\" content=\"Here are five quick tips to make you much more effective at interpreting and solving GMAT problems involving percents, one of the most common GMAT questions.   Percents and Decimals Fundamentally, a percent is a fraction out of 100 \u2013 it is per centum (Latin for “per 100”).\u00a0 It’s easy to change a percent to […]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/magoosh.com\/gmat\/understanding-percents-on-the-gmat\/\" \/>\n<meta property=\"og:site_name\" content=\"Magoosh Blog \u2014 GMAT\u00ae Exam\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/MagooshGMAT\/\" \/>\n<meta property=\"article:published_time\" content=\"2012-02-02T22:40:20+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-01-15T18:50:58+00:00\" \/>\n<meta name=\"author\" content=\"Mike M\u1d9cGarry\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@MagooshGMAT\" \/>\n<meta name=\"twitter:site\" content=\"@MagooshGMAT\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Mike M\u1d9cGarry\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/magoosh.com\/gmat\/understanding-percents-on-the-gmat\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/magoosh.com\/gmat\/understanding-percents-on-the-gmat\/\"},\"author\":{\"name\":\"Mike M\u1d9cGarry\",\"@id\":\"https:\/\/magoosh.com\/gmat\/#\/schema\/person\/320346c205075513344435baf9b0521b\"},\"headline\":\"Understanding Percents on the GMAT\",\"datePublished\":\"2012-02-02T22:40:20+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/magoosh.com\/gmat\/understanding-percents-on-the-gmat\/\"},\"wordCount\":848,\"commentCount\":47,\"publisher\":{\"@id\":\"https:\/\/magoosh.com\/gmat\/#organization\"},\"articleSection\":[\"GMAT Math\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/magoosh.com\/gmat\/understanding-percents-on-the-gmat\/\",\"url\":\"https:\/\/magoosh.com\/gmat\/understanding-percents-on-the-gmat\/\",\"name\":\"Understanding Percents on the GMAT - 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Beyond standardized testing, Mike has over 20 years of both private and public high school teaching experience specializing in math and physics. In his free time, Mike likes smashing foosballs into orbit, and despite having no obvious cranial deficiency, he insists on rooting for the NY Mets. Learn more about the GMAT through Mike's Youtube video explanations.","sameAs":["https:\/\/www.youtube.com\/c\/MagooshGMATChannel\/featured"],"award":["Magna cum laude from Harvard"],"knowsAbout":["GMAT"],"knowsLanguage":["English"],"jobTitle":"Content Creator","worksFor":"Magoosh","url":"https:\/\/magoosh.com\/gmat\/author\/mikemcgarry\/"}]}},"authors":[{"term_id":13209,"user_id":26,"is_guest":0,"slug":"mikemcgarry","display_name":"Mike M\u1d9cGarry","avatar_url":"https:\/\/secure.gravatar.com\/avatar\/6b06de81592cd77bb46aa560cc59aee179cba4d042835c3529221ea1b344cce0?s=96&d=mm&r=g","user_url":"","last_name":"M\u1d9cGarry","first_name":"Mike","description":"Mike served as a GMAT Expert at Magoosh, helping create hundreds of lesson videos and practice questions to help guide GMAT students to success. He was also featured as \"member of the month\" for over two years at <a href=\"https:\/\/gmatclub.com\/blog\/2012\/09\/mike-mcgarrys-gmat-experience\/\" rel=\"noopener noreferrer\">GMAT Club<\/a>. Mike holds an A.B. in Physics (graduating <em>magna cum laude<\/em>) and an M.T.S. in Religions of the World, both from Harvard. Beyond standardized testing, Mike has over 20 years of both private and public high school teaching experience specializing in math and physics. In his free time, Mike likes smashing foosballs into orbit, and despite having no obvious cranial deficiency, he insists on rooting for the NY Mets. Learn more about the GMAT through Mike's <a href=\"https:\/\/www.youtube.com\/c\/MagooshGMATChannel\/featured\" rel=\"noopener noreferrer\">Youtube <\/a>video explanations and resources like <a href=\"https:\/\/magoosh.com\/gmat\/whats-a-good-gmat-score\/\" rel=\"noopener noreferrer\">What is a Good GMAT Score?<\/a> and the <a href=\"https:\/\/magoosh.com\/gmat\/gmat-diagnostic-test\/\" rel=\"noopener noreferrer\">GMAT Diagnostic Test<\/a>."}],"_links":{"self":[{"href":"https:\/\/magoosh.com\/gmat\/wp-json\/wp\/v2\/posts\/552","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/magoosh.com\/gmat\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/magoosh.com\/gmat\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/magoosh.com\/gmat\/wp-json\/wp\/v2\/users\/26"}],"replies":[{"embeddable":true,"href":"https:\/\/magoosh.com\/gmat\/wp-json\/wp\/v2\/comments?post=552"}],"version-history":[{"count":0,"href":"https:\/\/magoosh.com\/gmat\/wp-json\/wp\/v2\/posts\/552\/revisions"}],"wp:attachment":[{"href":"https:\/\/magoosh.com\/gmat\/wp-json\/wp\/v2\/media?parent=552"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/magoosh.com\/gmat\/wp-json\/wp\/v2\/categories?post=552"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/magoosh.com\/gmat\/wp-json\/wp\/v2\/tags?post=552"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/magoosh.com\/gmat\/wp-json\/wp\/v2\/ppma_author?post=552"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}