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Online GMAT Glossary

Percent
Literally, “per one hundred”; expresses a special part-to-whole relationship between a number (the part) and one hundred (the whole). A special type of fraction or decimal that involves the number 100.
Finding a percentage of a number
Translate the words into an equation.
"What" = a variable
"is" = equals
x% = (x/100)
Example:

What is 25% of 40?
Translation: n = (25/100)*40.

Given: 30% of what is 50?
Translation: (30/100) * n = 50?

Percent increase or decrease, or percent change
The percentage of the starting point that some number increased or decreased.
Formula: Change = Percent
              Original      100
Example:

Given a starting point of 10 and an ending point of 14, the change is 4 and the original is 10, so the percent increase is (4/10) = (2/5) = 40%.

Simple Interest
"Principal" is the starting amount. "Rate" is the interest rate at which the money grows per a given period of time; express the rate as a decimal in the formula. Time must be expressed in the same units used for time in the Rate.
Formula: Simple Interest = Principal Amount * Rate * Time
Example:

Given $1,000 invested for 6 months at an annual rate of 4%, $1,000 is the principal amount, 0.04 is the rate (expressed as a decimal) per year (annual), and 0.5 years is the time (expressed in the same units, years, as the time used in the rate).

Compound Interest
P is the principal, or starting amount. r is the rate at which the money grows per a given period of time; express the rate as a decimal in the formula. n is the number of times per unit time (as given by the rate) that the interest is compounded. t is the length of time expressed in the same units used for time in the rate, r.
Formula: P * (1+ (r/n))^nt = Compounded Amount
Example:

Given $1,000 invested for 2 years, compounded semi-annually, at an annual, or yearly, rate of 4%, $1,000 is the principal amount, 0.04 is the rate, n is 2 (because it is compounded twice in a year), and t is 2 (because the money is invested for 2 years). The above problem is expressed as:
$1,000 * (1 + (0.04 / 2))^(2 * 2) = $1,082.43

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