Figuring out How To Get The Percentage Of Money is a crucial skill for managing your personal finances, and money-central.com is here to help you master it. Understanding percentage calculations empowers you to make informed financial decisions, and provides the framework for financial literacy, budgetary planning, and smart investments. Let’s delve into the intricacies of money percentages, investment returns, and budget allocation, all while enhancing your financial acumen.
1. Understanding The Basics: What Is Percentage And Why Is It Important For Money Management?
Percentage is a way of expressing a number as a fraction of 100, and it’s a fundamental concept for money management. It enables you to calculate discounts, interest rates, investment returns, and budget allocations, providing a clear understanding of your financial situation.
1.1. Defining Percentage In Financial Terms
In finance, a percentage represents a proportional amount of a sum. For instance, if you have a budget of $1,000 and allocate 20% to groceries, you’re setting aside $200 for groceries. Percentages provide a standardized way to compare different financial figures, irrespective of their absolute values. According to research from New York University’s Stern School of Business, understanding percentages significantly improves financial decision-making, as it allows individuals to assess relative changes and proportions more effectively.
1.2. The Relevance Of Percentages In Everyday Money Matters
Percentages are relevant in numerous everyday money matters. From calculating sales discounts to understanding interest rates on loans and savings accounts, percentages are crucial. Here are a few examples:
- Discounts: Knowing how to calculate percentage discounts helps you determine the actual savings on a product.
- Interest Rates: Understanding interest rates, expressed as percentages, is essential for loans, mortgages, and savings accounts.
- Investment Returns: Investment returns are often expressed as percentages, allowing you to compare the performance of different investments.
- Budgeting: Allocating portions of your income to various expenses is often done using percentages.
- Taxes: Calculating taxes often involves percentages of your income.
1.3. Real-World Examples Of Percentage Use In Financial Scenarios
To illustrate the importance of percentages, consider these real-world scenarios:
- Scenario 1: Discount Calculation:
- You want to buy a television that originally costs $800. It’s on sale for 25% off. To calculate the sale price, you multiply $800 by 25% (0.25), which equals $200. So, the discount is $200, and the final price is $800 – $200 = $600.
- Scenario 2: Interest on Savings Account:
- You have $5,000 in a savings account with an annual interest rate of 2%. To calculate the interest earned in a year, you multiply $5,000 by 2% (0.02), which equals $100. Therefore, you will earn $100 in interest.
- Scenario 3: Investment Returns:
- You invested $10,000 in a stock, and after a year, the investment grew by 15%. To calculate your return, you multiply $10,000 by 15% (0.15), which equals $1,500. Your investment has increased by $1,500.
- Scenario 4: Budget Allocation:
- Your monthly income is $4,000, and you want to allocate 30% to housing, 20% to food, 15% to transportation, 10% to savings, and 25% to other expenses. This means you allocate $1,200 to housing, $800 to food, $600 to transportation, $400 to savings, and $1,000 to other expenses.
1.4. How Money-Central.Com Simplifies Percentage Calculations
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2. The Basic Formula: How To Calculate Percentage Of A Given Amount?
The basic formula to calculate the percentage of a given amount is: (Part / Whole) × 100. Understanding this formula and its applications is essential for various financial calculations.
2.1. Breaking Down The Percentage Formula
The percentage formula consists of three main components:
- Part: The specific amount you’re interested in.
- Whole: The total amount or reference value.
- Percentage: The proportion of the part relative to the whole, expressed as a percentage.
The formula to calculate the percentage is:
Percentage = (Part / Whole) × 100
This formula determines what percentage the “Part” represents of the “Whole.”
2.2. Step-By-Step Guide To Using The Formula
Here’s a step-by-step guide to using the percentage formula:
- Identify The Part: Determine the specific amount you want to express as a percentage of the whole.
- Identify The Whole: Determine the total amount or reference value.
- Divide The Part By The Whole: Divide the “Part” by the “Whole” to get a decimal.
- Multiply By 100: Multiply the result by 100 to convert the decimal into a percentage.
Example:
Suppose you want to find out what percentage $50 is of $200.
- Part: $50
- Whole: $200
- Divide: $50 / $200 = 0.25
- Multiply: 0.25 × 100 = 25%
Therefore, $50 is 25% of $200.
2.3. Practical Examples And Exercises For Calculation
Let’s go through some practical examples and exercises to reinforce your understanding:
Example 1: Calculating Savings
You saved $300 on an item that originally cost $1,200. What percentage did you save?
- Part: $300
- Whole: $1,200
- Calculation: ($300 / $1,200) × 100 = 25%
You saved 25%.
Example 2: Budget Allocation
You spend $600 on rent out of a monthly income of $3,000. What percentage of your income goes to rent?
- Part: $600
- Whole: $3,000
- Calculation: ($600 / $3,000) × 100 = 20%
20% of your income goes to rent.
Exercise 1:
You scored 80 out of 100 on a test. What is your percentage score?
Exercise 2:
You want to allocate 15% of your $5,000 monthly income to transportation. How much money is allocated to transportation?
Answers:
- Exercise 1: 80%
- Exercise 2: $750
2.4. Tips For Avoiding Common Mistakes
When calculating percentages, avoid these common mistakes:
- Misidentifying The Part And Whole: Ensure you correctly identify which value is the part and which is the whole.
- Forgetting To Multiply By 100: Always multiply the result of the division by 100 to convert it into a percentage.
- Incorrectly Converting Decimals: Double-check your decimal conversions to ensure accuracy.
By avoiding these mistakes, you can ensure precise and reliable percentage calculations.
3. Calculating Percentage Increase And Decrease: Step-By-Step Methods
Calculating percentage increase and decrease is crucial for evaluating financial changes over time. Understanding these calculations helps you assess investment performance, track budget variations, and analyze price changes.
3.1. Understanding Percentage Increase
Percentage increase measures the extent to which a quantity has risen. The formula for percentage increase is:
Percentage Increase = [(New Value - Original Value) / Original Value] × 100
This formula determines the proportional increase relative to the original value.
3.2. Step-By-Step Guide To Calculating Percentage Increase
Here’s a step-by-step guide to calculating percentage increase:
- Identify The Original Value: Determine the starting value.
- Identify The New Value: Determine the ending value.
- Calculate The Difference: Subtract the original value from the new value.
- Divide By The Original Value: Divide the difference by the original value.
- Multiply By 100: Multiply the result by 100 to convert it into a percentage.
Example:
An investment was initially worth $5,000, and now it’s worth $6,000. What is the percentage increase?
- Original Value: $5,000
- New Value: $6,000
- Difference: $6,000 – $5,000 = $1,000
- Divide: $1,000 / $5,000 = 0.20
- Multiply: 0.20 × 100 = 20%
The investment increased by 20%.
3.3. Understanding Percentage Decrease
Percentage decrease measures the extent to which a quantity has fallen. The formula for percentage decrease is:
Percentage Decrease = [(Original Value - New Value) / Original Value] × 100
This formula determines the proportional decrease relative to the original value.
3.4. Step-By-Step Guide To Calculating Percentage Decrease
Here’s a step-by-step guide to calculating percentage decrease:
- Identify The Original Value: Determine the starting value.
- Identify The New Value: Determine the ending value.
- Calculate The Difference: Subtract the new value from the original value.
- Divide By The Original Value: Divide the difference by the original value.
- Multiply By 100: Multiply the result by 100 to convert it into a percentage.
Example:
The price of a product was initially $200, and now it’s $150. What is the percentage decrease?
- Original Value: $200
- New Value: $150
- Difference: $200 – $150 = $50
- Divide: $50 / $200 = 0.25
- Multiply: 0.25 × 100 = 25%
The price decreased by 25%.
3.5. Real-World Applications And Examples
Let’s look at some real-world applications and examples:
- Investment Growth:
- An investment portfolio increased from $20,000 to $25,000. The percentage increase is [($25,000 – $20,000) / $20,000] × 100 = 25%.
- Expense Reduction:
- You reduced your monthly expenses from $3,000 to $2,500. The percentage decrease is [($3,000 – $2,500) / $3,000] × 100 = 16.67%.
- Sales Performance:
- A company’s sales increased from $100,000 to $120,000. The percentage increase is [($120,000 – $100,000) / $100,000] × 100 = 20%.
3.6. Common Mistakes And How To Avoid Them
When calculating percentage increase and decrease, avoid these common mistakes:
- Using The Wrong Base Value: Ensure you use the original value as the base for your calculations.
- Mixing Up Increase And Decrease Formulas: Use the correct formula for increase and decrease.
- Incorrectly Subtracting Values: Ensure you subtract values in the correct order to get a positive result for increase and a negative result for decrease.
3.7. Utilizing Money-Central.Com For Easy Calculations
Money-central.com provides tools for easy percentage increase and decrease calculations. Our resources simplify these calculations, ensuring you accurately track and analyze financial changes. Check out our resources.
4. Applying Percentages To Budgets: Creating And Managing Your Finances
Applying percentages to budgets is essential for effective financial management. By allocating portions of your income to various categories, you can create a balanced budget and achieve your financial goals.
4.1. Setting Up A Budget Using Percentages
To set up a budget using percentages, follow these steps:
- Calculate Your Total Income: Determine your total monthly or annual income.
- Identify Essential Expenses: List all essential expenses like housing, food, transportation, and utilities.
- Allocate Percentages: Assign a percentage of your income to each expense category. A common budgeting rule is the 50/30/20 rule:
- 50% for needs (essential expenses)
- 30% for wants (non-essential expenses)
- 20% for savings and debt repayment
- Calculate The Dollar Amount: Multiply your total income by the percentage allocated to each category to find the dollar amount.
- Track Your Spending: Monitor your actual spending against your budgeted amounts.
4.2. Common Budgeting Rules And Their Percentage Breakdowns
Several budgeting rules can help you allocate your income effectively:
- 50/30/20 Rule:
- 50% for Needs: Essential expenses like rent, utilities, and groceries.
- 30% for Wants: Non-essential expenses like dining out, entertainment, and hobbies.
- 20% for Savings and Debt Repayment: Contributions to savings accounts, investments, and debt payments.
- 80/20 Rule:
- 80% for Spending: Covers all expenses, both essential and non-essential.
- 20% for Savings and Investments: Focuses on saving and investing a significant portion of your income.
- 60/40 Rule:
- 60% for Fixed Expenses: Essential expenses that are relatively constant each month.
- 40% for Flexible Spending, Savings, and Debt Repayment: Provides more flexibility in allocating funds to various categories.
4.3. Example Of A Percentage-Based Budget
Let’s create a percentage-based budget for someone with a monthly income of $4,000 using the 50/30/20 rule:
- Total Income: $4,000
- Needs (50%): $2,000
- Housing: $1,200
- Utilities: $200
- Groceries: $400
- Transportation: $200
- Wants (30%): $1,200
- Dining Out: $300
- Entertainment: $300
- Hobbies: $300
- Shopping: $300
- Savings and Debt Repayment (20%): $800
- Savings: $400
- Debt Repayment: $400
4.4. Adjusting Your Budget Based On Percentage Variances
Regularly review your budget to ensure it aligns with your financial goals. If you find that you’re consistently overspending in a category, adjust the percentage allocation accordingly. For example, if you’re spending 40% on needs instead of 50%, consider reducing spending in the “wants” category to compensate.
4.5. Tools And Resources On Money-Central.Com For Budgeting
Money-central.com offers budgeting tools and resources to help you create and manage your budget effectively. Use our calculators and guides to allocate percentages, track spending, and achieve your financial goals. Visit money-central.com for more details.
5. Calculating Investment Returns: Understanding Percentage Gains And Losses
Calculating investment returns is essential for evaluating the performance of your investments. Understanding percentage gains and losses helps you make informed decisions and optimize your investment strategy.
5.1. Basic Formula For Calculating Investment Returns
The basic formula for calculating investment returns is:
Return Percentage = [(Final Value - Initial Value) / Initial Value] × 100
This formula determines the percentage gain or loss relative to the initial investment.
5.2. Step-By-Step Guide To Calculating Investment Returns
Here’s a step-by-step guide to calculating investment returns:
- Identify The Initial Value: Determine the starting value of the investment.
- Identify The Final Value: Determine the ending value of the investment.
- Calculate The Difference: Subtract the initial value from the final value.
- Divide By The Initial Value: Divide the difference by the initial value.
- Multiply By 100: Multiply the result by 100 to convert it into a percentage.
Example:
You invested $10,000 in a stock, and after a year, the investment is worth $11,500. What is the return percentage?
- Initial Value: $10,000
- Final Value: $11,500
- Difference: $11,500 – $10,000 = $1,500
- Divide: $1,500 / $10,000 = 0.15
- Multiply: 0.15 × 100 = 15%
The investment return is 15%.
5.3. Distinguishing Between Gains And Losses
- Gains: If the final value is higher than the initial value, the result is a percentage gain.
- Losses: If the final value is lower than the initial value, the result is a percentage loss.
5.4. Annualized Return Vs. Total Return
- Total Return: The total percentage gain or loss over the entire investment period.
- Annualized Return: The average annual percentage gain or loss, which is particularly useful for investments held for multiple years. The formula for annualized return is:
Annualized Return = [(1 + Total Return)^(1 / Number of Years) - 1] × 100
Example:
An investment had a total return of 50% over 5 years. What is the annualized return?
Annualized Return = [(1 + 0.50)^(1 / 5) - 1] × 100 = 8.45%
5.5. Calculating Returns On Multiple Investments
To calculate the overall return on multiple investments, calculate the return for each investment individually and then find the weighted average based on the initial investment amounts.
Example:
You have two investments:
- Investment A: Initial value of $5,000, final value of $6,000 (20% return)
- Investment B: Initial value of $10,000, final value of $11,000 (10% return)
The weighted average return is:
[(($5,000 / $15,000) × 20%) + (($10,000 / $15,000) × 10%)] = 13.33%
5.6. Understanding The Impact Of Fees And Taxes
Fees and taxes can significantly impact your investment returns. Always factor in these costs when evaluating investment performance.
- Fees: Include management fees, transaction fees, and other expenses.
- Taxes: Consider capital gains taxes on profits from selling investments.
5.7. Money-Central.Com’s Investment Calculators
Money-central.com offers investment calculators to help you calculate returns, analyze performance, and make informed investment decisions. Use our tools to optimize your investment strategy. Check out our resources.
6. Interest Rates: How To Calculate Percentage Interest On Loans And Savings?
Calculating percentage interest on loans and savings is crucial for understanding the true cost of borrowing and the potential returns on savings. Understanding these calculations helps you make informed financial decisions.
6.1. Understanding Simple Interest
Simple interest is calculated only on the principal amount. The formula for simple interest is:
Simple Interest = Principal × Rate × Time
Where:
- Principal: The initial amount of the loan or savings.
- Rate: The annual interest rate (as a decimal).
- Time: The duration of the loan or savings in years.
Example:
You deposit $1,000 in a savings account with a simple interest rate of 5% per year for 3 years.
Simple Interest = $1,000 × 0.05 × 3 = $150
6.2. Understanding Compound Interest
Compound interest is calculated on the principal amount and the accumulated interest from previous periods. The formula for compound interest is:
Compound Interest = Principal × (1 + Rate / n)^(nt) - Principal
Where:
- Principal: The initial amount of the loan or savings.
- Rate: The annual interest rate (as a decimal).
- n: The number of times that interest is compounded per year.
- t: The duration of the loan or savings in years.
Example:
You deposit $1,000 in a savings account with a compound interest rate of 5% per year, compounded annually for 3 years.
Compound Interest = $1,000 × (1 + 0.05 / 1)^(1×3) - $1,000 = $157.63
6.3. Calculating Interest On Loans (E.G., Mortgages, Auto Loans)
To calculate the monthly payment on a loan, you can use the following formula:
M = P [i(1 + i)^n] / [(1 + i)^n – 1]
Where:
- M: Monthly payment
- P: Principal loan amount
- i: Monthly interest rate (annual rate divided by 12)
- n: Number of months (loan term in years multiplied by 12)
Example:
You take out a $200,000 mortgage with an annual interest rate of 4% for 30 years.
- P = $200,000
- i = 0.04 / 12 = 0.003333
- n = 30 × 12 = 360
M = $200,000 [0.003333(1 + 0.003333)^360] / [(1 + 0.003333)^360 – 1] = $954.77
6.4. Calculating Interest On Savings Accounts And Certificates Of Deposit (CDs)
The interest on savings accounts and CDs is typically compounded daily, monthly, or quarterly. Use the compound interest formula to calculate the interest earned.
Example:
You deposit $5,000 in a CD with an annual interest rate of 3%, compounded monthly for 5 years.
- Principal = $5,000
- Rate = 0.03
- n = 12
- t = 5
Compound Interest = $5,000 × (1 + 0.03 / 12)^(12×5) - $5,000 = $808.06
6.5. Understanding APY (Annual Percentage Yield) Vs. APR (Annual Percentage Rate)
- APR (Annual Percentage Rate): The annual interest rate without considering the effect of compounding.
- APY (Annual Percentage Yield): The effective annual interest rate, taking into account the effect of compounding. APY is usually higher than APR because it reflects the actual interest earned in a year.
6.6. How Money-Central.Com Helps Calculate Interest
Money-central.com provides tools to calculate simple and compound interest, loan payments, and savings growth. Use our calculators to understand interest rates and optimize your financial strategies. Visit our website.
7. Percentages In Debt Management: Calculating Debt Ratios And Payments
Using percentages in debt management helps you evaluate your debt levels and manage your payments effectively. Calculating debt ratios and understanding how interest affects your payments is crucial for financial health.
7.1. Calculating Debt-To-Income (DTI) Ratio
The debt-to-income (DTI) ratio is a percentage that compares your monthly debt payments to your gross monthly income. The formula for DTI is:
DTI = (Total Monthly Debt Payments / Gross Monthly Income) × 100
A lower DTI ratio indicates better financial health.
Example:
Your gross monthly income is $5,000, and your total monthly debt payments are $1,500.
DTI = ($1,500 / $5,000) × 100 = 30%
7.2. Understanding Different Types Of Debt Ratios
- Front-End Ratio: The percentage of your income that goes towards housing costs (mortgage, property taxes, insurance).
- Back-End Ratio: The percentage of your income that goes towards all debt payments, including housing costs, credit cards, and loans.
7.3. Impact Of Interest Rates On Debt Payments
Interest rates significantly impact your debt payments. Higher interest rates result in higher monthly payments and a greater total cost of borrowing.
Example:
You have a $10,000 credit card balance with an interest rate of 18%. If you only make the minimum payment, it will take you many years to pay off the balance, and you’ll pay a substantial amount in interest.
7.4. Calculating Credit Card Interest
Credit card interest is typically calculated using the average daily balance method. The steps are:
- Calculate The Daily Balance: Add up the balance for each day in the billing cycle.
- Calculate The Average Daily Balance: Divide the sum of the daily balances by the number of days in the billing cycle.
- Calculate The Daily Interest Rate: Divide the annual interest rate (APR) by 365.
- Calculate The Interest Charge: Multiply the average daily balance by the daily interest rate and the number of days in the billing cycle.
7.5. Strategies For Reducing Debt Using Percentage-Based Goals
- Debt Snowball Method: Pay off the smallest debt first, regardless of the interest rate, to gain momentum.
- Debt Avalanche Method: Pay off the debt with the highest interest rate first to save money on interest.
Set percentage-based goals for debt reduction. For example, aim to reduce your credit card balance by 10% each month.
7.6. Money-Central.Com’s Debt Management Tools
Money-central.com provides debt management tools to help you calculate debt ratios, understand interest payments, and develop strategies for reducing debt. Use our calculators and resources to improve your financial health. Check out our resources.
8. Taxes: Understanding Percentage-Based Tax Rates And Deductions
Understanding percentage-based tax rates and deductions is crucial for managing your tax obligations effectively. Knowing how taxes affect your income helps you plan your finances and take advantage of available deductions.
8.1. Understanding Marginal Tax Rates
Marginal tax rates are the rates applied to each portion of your income that falls within a specific tax bracket. The U.S. federal income tax system uses a progressive tax system, where higher income levels are taxed at higher rates.
Example:
For the 2023 tax year, the tax brackets for single filers are:
| Tax Rate | Income Range |
|---|---|
| 10% | $0 to $10,950 |
| 12% | $10,951 to $46,275 |
| 22% | $46,276 to $101,750 |
| 24% | $101,751 to $192,150 |
| 32% | $192,151 to $578,125 |
| 35% | $578,126 to $693,750 |
| 37% | Over $693,750 |
If your taxable income is $50,000, you’ll be taxed 10% on the first $10,950, 12% on the income between $10,951 and $46,275, and 22% on the income between $46,276 and $50,000.
8.2. Calculating Effective Tax Rate
The effective tax rate is the actual percentage of your income that you pay in taxes. It is calculated by dividing your total tax liability by your total income.
Effective Tax Rate = (Total Tax Liability / Total Income) × 100
Example:
If your total tax liability is $8,000 and your total income is $50,000, your effective tax rate is:
Effective Tax Rate = ($8,000 / $50,000) × 100 = 16%
8.3. Understanding Tax Deductions And Credits
- Tax Deductions: Reduce your taxable income, lowering your tax liability.
- Tax Credits: Directly reduce the amount of tax you owe.
Percentage-based deductions, like the standard deduction, reduce your taxable income by a set percentage.
8.4. How Percentage-Based Tax Policies Affect Your Income
Percentage-based tax policies, such as progressive tax rates, affect your income by taxing higher portions of your income at higher rates. Understanding these policies helps you plan your finances and minimize your tax liability.
8.5. Estimating Your Tax Liability Using Percentages
To estimate your tax liability, follow these steps:
- Calculate Your Gross Income: Determine your total income before any deductions.
- Subtract Deductions: Subtract any eligible deductions to arrive at your taxable income.
- Apply Tax Rates: Apply the appropriate tax rates based on your tax bracket.
- Calculate Tax Liability: Sum the tax amounts for each tax bracket to determine your total tax liability.
8.6. Resources On Money-Central.Com For Tax Planning
Money-central.com provides resources for tax planning, including calculators and guides to help you understand tax rates, deductions, and credits. Use our tools to estimate your tax liability and plan your finances effectively. Visit our website.
9. Percentage-Based Financial Goals: Setting And Achieving Targets
Setting percentage-based financial goals is an effective way to stay motivated and track your progress. By setting targets as percentages, you can easily monitor your savings, debt reduction, and investment growth.
9.1. Setting Savings Goals Using Percentages
Set savings goals as a percentage of your income. For example, aim to save 15% of your monthly income.
Example:
If your monthly income is $4,000, saving 15% means you should save $600 each month.
9.2. Setting Debt Reduction Goals Using Percentages
Set debt reduction goals as a percentage of your outstanding debt. For example, aim to reduce your credit card debt by 10% each month.
Example:
If your credit card debt is $5,000, reducing it by 10% means you should pay off $500 each month.
9.3. Setting Investment Growth Goals Using Percentages
Set investment growth goals as a percentage return on your investments. For example, aim for an annual return of 8% on your investment portfolio.
Example:
If your investment portfolio is worth $50,000, an 8% return means you should aim for a gain of $4,000 in a year.
9.4. Tracking Progress Towards Your Goals
Regularly track your progress towards your percentage-based financial goals. Use spreadsheets, budgeting apps, or financial planning tools to monitor your savings, debt reduction, and investment growth.
9.5. Adjusting Goals Based On Performance
Adjust your goals based on your performance and changing circumstances. If you consistently exceed your goals, consider setting more ambitious targets. If you struggle to meet your goals, reassess your strategy and make necessary adjustments.
9.6. Utilizing Money-Central.Com For Goal Setting And Tracking
money-central.com offers tools to help you set and track your financial goals. Use our calculators and resources to monitor your progress and achieve your targets. Visit our website.
10. Advanced Percentage Calculations: Complex Financial Scenarios
Advanced percentage calculations are essential for understanding complex financial scenarios such as calculating present and future values, analyzing financial ratios, and understanding the time value of money.
10.1. Calculating Present Value (PV)
Present value is the current value of a future sum of money or stream of cash flows, given a specified rate of return. The formula for present value is:
PV = FV / (1 + r)^n
Where:
- PV: Present Value
- FV: Future Value
- r: Discount Rate (as a decimal)
- n: Number of periods
Example:
You want to know the present value of $10,000 you will receive in 5 years, assuming a discount rate of 6%.
PV = $10,000 / (1 + 0.06)^5 = $7,472.58
10.2. Calculating Future Value (FV)
Future value is the value of an asset or investment at a specified date in the future, based on an assumed rate of growth. The formula for future value is:
FV = PV × (1 + r)^n
Where:
- FV: Future Value
- PV: Present Value
- r: Interest Rate (as a decimal)
- n: Number of periods
Example:
You invest $5,000 today at an annual interest rate of 7%. What will be the value of your investment in 10 years?
FV = $5,000 × (1 + 0.07)^10 = $9,835.76
10.3. Analyzing Financial Ratios Using Percentages
Financial ratios provide insights into a company’s financial performance. Some common financial ratios include:
- Gross Profit Margin: (Gross Profit / Revenue) × 100
- Net Profit Margin: (Net Income / Revenue) × 100
