What is a percentage?

Originating from the Latin term โ€œper centum,โ€ meaning โ€œby a hundred,โ€ a percentage expresses a portion of 100. Fractions such as ยพ and decimals such as 0.75 can all be expressed as percentages when used with a percent sign. The percent sign is โ€œ%โ€ and when used with a decimal, the conversion is easy.

Since 0.75 represents a portion of the number 1, it can be expressed as 75%. Percentages are extremely common in daily life; they are used for tipping, investing, and more. Since measurement is so integral in society, understanding how to calculate, use, and communicate percentages is critical.

How do I use the percentage calculator?

Sometimes, figuring out the percent of something isnโ€™t as easy as it looks. Where you might be able to easily tell that the number 30 is 30% of 100, it can be harder to calculate the percentage of 45 and 800.

To calculate a percentage, you simply divide 45/800, which equals 5.625%. With the percentage calculator above, you donโ€™t have to do any math manually. Instead, input the details youโ€™re trying to solve for and click โ€œenter.โ€

How did percentages become so common?

In Roman times, the decimal system had not yet been developed, so the Romans depended on fractions for many things. A tax was placed on goods sold at auction that was 1/100. Though percentages werenโ€™t yet developed, computing the tax owed was the same thing as computing a percentage.

As money grew with time, dealing with things in a denomination of 100 was simple and made sense, so it became even more common. Percentage calculations were critical components of profit and loss, as well as interest rates. By the 17th century, communicating interest rates in the hundredths was the norm.

These calculations carried through to modern times, and now, percentages dictate so many aspects of our lives. Our financial well-being depends on understanding percentages, but they also pop up in very common ways such as tipping, getting clothes on sale, and even grading in academic settings.

What is the history of the percent sign?

The sign for percent, which is %, came from the Italian term โ€œper cento.โ€ The โ€œperโ€ part was usually abbreviated, using a โ€œpโ€ for shorthand. Over time the โ€œpโ€ dropped off and people shortened โ€œcentoโ€ to be two circles like โ€œo o.โ€

Over time, because fractions use โ€œ/โ€ as a way to denote the fact that it is a fraction, people started combining the โ€œo oโ€ with โ€œ/โ€. After all, the two symbols are closely related. Eventually, percentages were signified by โ€œ%โ€ which is still true today.

Though the story of the percentage sign is not all that exciting, itโ€™s fascinating to think about how a simple writing shortcut means so much in society today.

Where will I see percentages in my daily life?

Everyone should have a broad understanding of percentages. There are many instances beyond finance where percentages are useful:

  • Tipping
  • Grades
  • Measuring digital storage usage
  • Gambling or betting
  • Crime statistics
  • Shopping discounts
  • Time management

These are just a few examples, but percentages help put things into a uniform perspective. If you have 1.5 gigabytes of storage on your phone, and you have used 1.2 gigabytes, you can use the percentage calculator to figure out that you only have 20% of your space left. The other 80% is used up.

Where are percentages used in personal finance?

When you start getting older and managing your finances independently, percentages become even more important. Since percentage calculations are common in financial transactions, youโ€™ll see them everywhere, such as:

  • Interest rates for credit cards, loans, and investments
  • Return on investment calculations
  • Down payment requirements for a mortgage
  • Portfolio growth calculations
  • Retirement savings

Letโ€™s put it in perspective. In the realm of lending and borrowing money, interest rates are so important. Lenders charge interest as a way to make money, so if youโ€™re a borrower, you want a loan with the lowest interest rates. One lender might offer 10% interest while another offers 7% interest. If the length and amounts of the loans are the same, youโ€™ll know that taking the 7% interest rate loan will cost less in the long run. Percentages are key metrics when making any type of financial decision.

How will understanding percentages help me?

Thereโ€™s a reason that children start learning percentages early in elementary school โ€“ because they are important! Whether you want to get your fair share of a pizza or get a good rate on your home loan, understanding percentages is the first step.