Southern Maramag Colleges Module 2 BUSINESS MATHEMATICS

P2 South Pob., Maramag, Buk. PERCENTAGE, RATIO AND PROPORTION

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Learning Outcomes
After going through this module, you are expected to:
the original amount or value before any calculations are made
2. Explain the relationship between base, rate, and percentage;
3. Solve for the base, rate and percentage;
4. Define ratio and explain how it is used in business;
5. Define proportion and discuss how it is used in business; and
Direct proportion relates to two quantities that increase or decrease together at a constant rate; when one quantity doubles, the other also doubles.

LESSON 1: BASE, RATE AND PERCENTAGE

Base (B) - that number from which a certain number of hundredths is taken. As the basis of comparison, base is the
number generally preceded by the words “of”, “as much as”, “as large as”, “as many as”, and “as great as”. Base is also
regarded as the whole.
Rate (R) - the number of hundredths taken. It is the result of comparing a number to another number. It can be
expressed in percent, decimal or fraction.
Percentage (P) - the part considered in its quantitative relation to the whole. It is the part of the whole and the number.
being compared to another number. The result obtained when the rate is applied to the base is the percentage.
The basic formula to show the relationship between the base, rate and percentage is:
P = BR.
If any of the two elements are given, the remaining element can be solved for. It is important that we are able to
identify which is the base, and which is the percentage. The rate is easy to identify because it is generally expressed in
percent.
Finding the Percentage
By multiplying the base by the rate
Examples:
What is 1.50% of 24?
50% Find: P Solution: P = BR
B = 24 P = (24) (50%)
1
P = (24) ( )
2
P = 12
₱ 8.13
23% ₱365.00
Solution: P = BR
P = (₱365.00) (23%)
P = (₱365.00) (0.23)
P = ₱83.95
3. In a class of 40, 30% are girls:
a. How many are girls? b. What percentage of the population are boys?

Given:B = 40 R = 30%Find: P 30% are girls Find: Percent of boys

Solution: P = BR Solution: The whole class represents 100%, therefore,
P = (40)(30%) % of boys = 100 % - % of girls
P = (40)(0.3) 100% - 30%
P = 12 girls 70%
c. How many boys are in the class?
Given: Between class = 40 = B Number of boys
70% = R Solution: P = BR (40)(70%)
 No. of girls (from 1) = 12 P = (40)(0.7) P = 28

Finding the Base

P
To find the base, we divide the percentage by the rate, B =
R
Example:
1
1. If I have ₱ 25.00 which represents of my entire money, how much money do I have in total?
4
P
₱25.00 Solution: B =
R
$25.00
1 4
R= B= 1 B = ₱25.00 x B = ₱100
4 1
4
What is 300 if it is 50% of how many?
300
P 300 2
Given: P = 300 Find: B Soluton:B = B= = 1 = 300 x = 600
R 50% 1
2
50%
Finding the Rate
P
To find the rate, we divide the percentage by the base: R =
B
Examples:
What part of 400 is 50%?
Given:B = 400 P = 50 Find = R
P 50 5 1 1
Solution: R = = = = Check: x 400 = 50
B 400 40 8 8
2. How many percent of ₱ 1,200.00 is ₱ 400.00?
₱ 800.00
P ₱400 4 1 1
Solution: R = = = = .3333 = 33.33% = 33 %
B ₱1200 12 3 3

Finding the Rate of Increase/(Decrease)

Decrease - placed in parentheses because it is a negative figure and that is how negative is expressed in accounting.
Increase/(Decrease) - read as 'Increase or Decrease'. In accounting, parentheses mean subtraction. To compute the rate
To determine the increase or decrease, we first subtract the new quantity from the original quantity. This gives us the difference.
between the original quantity and the new quantity. This will give us the increase (positive) or decrease (negative). The
The difference is either positive if it is an increase and negative if it is a decrease. Then, we divide such increase/(decrease).
by the original quantity, thus:
Q2–Q1
Rate of Increase/(Decrease) = = Inc/(Dec) where Q1Original quantity Q2New quantity
Q1Q1
The increase/(decrease) is the percentage and the original quantity is the base. In our computations, we will
always denote a decrease by enclosing our figure in parentheses.
Examples:
Zeny ’s current salary is ₱ 3,600.00 a month. Her previous salary was ₱ 3,200.00. What is the rate of increase in
her salary?
₱ 3,600.00 = Q2Previous salary: ₱3,200.00 = Q1
Find: Rate of increase
Q2–Q1₱3600−₱3200 ₱400 1
Solution: R = = = = = .125 = 12.5%
Q1 ₱3200 ₱3200 8
This month ’s sales were₱ 12,000.00. Last month, the sales were₱ 15,000.00. Find the rate of
increase/(decrease)
Current sales = Q2= ₱ 12,000.00
Q1- ₱ 15,000.00
Find: Rate of increase/(decrease)
Q2–Q1 ₱12000.00−₱15000.00 ₱3000.00 (3) (1)
Solution: Rate of increase/(decrease) = = = = = =(.2)
Q1 ₱15,000.00 ₱15000.00 15 5
20%
Note: There is a decrease in sales denoted by the (₱3,000.00) we got; hence, we have a rate of decrease.
What number is 600 if it is 20% more than that number?

Given: P = 600 R = 120% (100% + 20%) Proof: 600 = B + 20% (B)

Find:B 600 = 500 + (20% x 500)
P 600 600
Solution: B = = = = 500 600 = 500 + 100 600 = 60
R 120%
ACTIVITY 1
Direction: Solve the following questions. Write your answers on your paper.
₱ 26,382.24
What did the company get? What percentage is the company's cost of sales? How much is the cost of sales?
2. A department store has a total stock of 750 shoes. Of this, 50% are for ladies, 30% are for men and the rest are
for children. Find the number of shoes in each category. How many percent are the children’s shoes?
3. A survey in a certain subdivision showed that all the 375 households own a TV set. If 45% of the households own
black and white TV sets, find the number
of black and white TV sets
b. of colored TV sets

LESSON 2 RATIO AND PROPORTION

Ratio – used in business in cases of partnership sharing of profits and losses, it is the relation between two numbers or
two magnitudes of the same kind.
There are two ways in finding the ratio:
1. Division
Example: If there are 20 boys and 30 girls, we find the ratio by dividing 20 boys by 30 girls and reduce it to
20 2
lowest terms; that is = = 2:3
30 3
2. Comparing numerators of fractions with the same denominator
Example: If we have a total of 100 T-shirts consisting of 30 small-sized, 50 medium-sized, and 20 large-sized T-shirts, we
30 50 20
have small medium
100 100 100
To get the ratio, we compare the numerators; hence, we say that the ratio of small: medium: large is 30:50:20 or
3: 5: 2. Adding all the numerators should give us the denominator. To check, 30 + 50 + 20 = 100. This is because
the total of the parts equals the whole.
Examples:
1. Albert and William are candidates. Albert received 2,500 votes while William received 3,000 votes. What is the
ratio of Albert’s vote against William’s?
Albert : William = 2,500 : 3,000 = 25 : 30 = 5 : 6
Check: Albert's votes + William's votes = 5,500
5 6
(5 500) + (5 500) = 5 500 (5 + 6 = 11, the denominator)
11 11
2,500 + 3 000 equals 5500
5 500 = 5 500
Proportions - the equality between ratios. The following are proportions:
a. 1:2 = 8:16 2 and 8 are the means while 1 and 16 are the extremes.
The product of the means equals the product of the extremes.
In above, 2 x 8 = 16
16 = 16
 2. You can also cross multiply; it's the same as multiplying the means and the extremes.
9 81
= 9 x 27 = 3 x 81
3 27
243 = 243
Proportions are of three types:
1. Direct proportion - a number is directly proportional to another when as one value increases, so does the other.
other.
Example: If three notebooks cost ₱15.00, how many notebooks can you buy with ₱60.00?
3 x
=
₱15.00₱60.00
(3)(60) 180
X= = = 12 notebooks
15 15
2. Indirect/inverse proportion - a number is indirectly proportional to another when as one value increases, the
other decreases.
Example: the relation between the time it takes to dig a well and install a water pump to supply the house with water
and the number of people needed to build it is an inverse proportion. The more people you have, the less time it takes.
3. Partitive proportion - involves identifying parts of a whole based on a given ratio of these parts. For example,
when a partnership agreement stipulates an agreed capitalization of₱ 100,000.00 and the partners are to divide
thr said capitalization in the ratio of 1:2:2, we are talking about participative proportion and we get the
corresponding parts as follows assuming the partners are X, Y and Z, respectively, contributing the capital.
1
X = x₱ 100,000.00 =₱ 20,000.00
5
2
Y = x ₱ 100,000.00 =₱ 40,000.00
5
2
Z = x₱ 100,000.00 =₱ 40,000.00
5
₱ 100,000.00

ACTIVITY 2
Directon: Solve the following questions. Show your solution. Write your answer on a piece of paper.
1. You decided to join the partnership of August and April. August has a capital of₱ 50,000.00 while April puts up a
capital of₱ 75,000.00. The three of you decided that your profit and loss ratio would be 1:2:3 for August, April.
and yourself, and you further agreed to make your capitalization equal to your profit sharing ratio. How much
Additional capital should April and yourself make to make your capital contributions equal to your profit and loss.
sharing time?
2. The partnership of M.A. Sikap, P.A. Ngarap and I.N. Tegridad earned a profit of₱ 87,500.00 for the current year.
If the profit and loss sharing ratio is in accordance with their capital ratio and their respective capital balances.
are M.A. Sikap,₱ 50,000.00 ; P.A. Ngarap₱ 100,000.00, and [Link],₱ 150,000.00, compute for the share
of each of the partners in their profit.

ACTIVITY 3
Direction: Answer the following questions. Write your answer on your paper.
A basketball team won 15 games and lost 13 games.
a. What is the ratio of games won to total games played?
b. What is the ratio of games won to games lost?
c. What is the ratio of games lost to games played?
d. What is the ratio of games lost to games won?
Divide 1,500 in the ratio of 1:2:3.
3. EJ has a new recipe calling for a mixture of chocolate powder and milk at a ratio of 2 cups chocolate powder for
1
every 5 cups of milk. If EJ used 7 cups of chocolate, how many cups of milk will be used?
4
 4. Michelle owns a specialty shop with three departments for jewelry, handbags, and shoes. If the sales for the
three departments are₱ 56,250.00₱ 11,250.00 and₱ 33,750.00 respectively, what is the sales ratio
among the three departments?
5. If you want to stock 144 T-shirts and the ratio of white, plain colored, and printed T-shirts is 1:3:2, how many of
What type should you stock?
6. Ramon saved a total of₱ 5,625.00 last year. This represents 18% of his annual salary. How much did he earn last year?
year?
7. An item that originally sells for₱ 25.00 now sells for₱ 30.00. What is the percent of increase/(decrease)?
8. This year, grapes cost₱ 150.00 per kilogram. Last year, a kilogram cost₱ 125.00. What is the percent of
increase/(decrease) in price?

Reference:
Mariano, N. (2016). Business Mathematics. First Edition. Manila, Philippines: Rex Book Store. pp 65 -89.

Prepared by: Roselle S. Villaquer

Contact details: 09107969153/rvillaquer@[Link]