Percentage reasoning

[herbivore12]

To go back to your original post, I wonder whether a "500% rise in inflation" means the same thing as a "500% inflation rate".

That is, if inflation is at 10%, a rise of 10 percentage points in inflation (to 20%) would mean a 100% increase in inflation, but would not mean that one would have to earn double last years' income to have the same purchasing power (prices will have risen, but not doubled; well, except maybe those for fuel!). I think . . .

So does your 500% rise in inflation mean that inflation has increased from 10% to 50% (or is it 60%? ), or are we really talking about inflation of 500%?

[fyffer]

Yes, that feels right to me, but what is the math behind it?

To calculate n00% of X.

(X times n) + X

I think the above confuses the matter.

100% of $10 is just $10, not $20.
100% more than $10 is indeed $20.


The key is the difference between "increase by" and "of".

If I have $100, and I increase it by 100%, I am adding the total amount, so I now have $200.

If I use the term "of", that implies multiplication,
so if I have $100, and my friend has 100% of the money I have, she has $100 as well.

So using your example, if I start with $10,000, a 500% increase is what I have now, plus 5X that, so $10K + 5x $10K = $60K.

Clear as MUD??

[carrie]

Yep, I think I have it now. I actually think I had it then, but I just wasn't quite sure why.

Many thanks to all who willingly took on my headache!

Carol

[Wombat]

Yes, that feels right to me, but what is the math behind it?

To calculate n00% of X.

(X times n) + X

I think the above confuses the matter.

Sorry, I meant n00% increase in X. But that was what Carol was asking for.

[dubhlinn]

To calculate n00% of X.

(X times n) + X

I think the above confuses the matter.

Sorry, I meant n00% increase in X. But that was what Carol was asking for.

I adore the pure simplicity of Mathematics.
Such a beautiful thing.
Right or wrong...he he he ..there is no gray area.

A world apart from Philosophy and Editing...

Do the math...

Purity is a provable thought..

Slan,
D.

[Wombat]

I think the above confuses the matter.

Sorry, I meant n00% increase in X. But that was what Carol was asking for.

I adore the pure simplicity of Mathematics.
Such a beautiful thing.
Right or wrong...he he he ..there is no gray area.

A world apart from Philosophy and Editing...

Do the math...

Purity is a provable thought..

Slan,
D.

Dub, you know what they say about males being unble to do two things at once. Well I'm incapable of being literate and numerate at the same time.

It's a celtic thing.

[dubhlinn]

I can dig that one Bro

It's always been a big thing to me about that which can be proven and that which can..well.if you like...be talked about

To each their own..

Slan,
D.

[BillChin]

The phrasing is causing the confusion. If the inflation rate is 1% annually, something that costs $100 today will cost $101 next year.

The formula:

Next year's price = current price x (1 + inflation rate).

101 = 100 * (1 +.01)
where .01 = 1%

If the inflation rate is 500%, it will be $600
600 = 100 * (1 + 5.00)
5.00 = 500%

The year after if the inflation rate continues at 500%, the item will cost $3600.
3600 = 600 * (1 + 5.00)

As an aside, I find it frightening how people can't do relatively simple math or estimates. The people here are WAY above average in intelligence and education and they struggle. There were some radio announcers saying that Warren Buffett's pledge to charity equaled $60,000 USD for each person on earth. The real estimate is $6 USD, a slight difference in what could be accomplished. The guys on the radio are above average in intelligence, but not so good at math.

[fiddleronvermouth]

As an aside, I find it frightening how people can't do relatively simple math or estimates. The people here are WAY above average in intelligence and education and they struggle. There were some radio announcers saying that Warren Buffett's pledge to charity equaled $60,000 USD for each person on earth. The real estimate is $6 USD, a slight difference in what could be accomplished. The guys on the radio are above average in intelligence, but not so good at math.

I don't think we're struggling with the math, but the English, (ie. the terminology of basic economics).

[BoneQuint]

Is this what you're getting at? If something "increases by x%" that means you're adding to it (increasing something means adding to what's already there). So an increase of 100 percent means adding 100% which means doubling.

The word "inflation" implies "increase." So 10% "inflation" means "increase by 10%" which means "add 10%".

(Edit: Heh, missed the whole second page before answering! Ooops.)

[Doug_Tipple]

Convert percentages to fractions, that should make it easier:

100% = 1.0
200% = 2.0
500% = 5.0
50% = .5
1% = .01

$536 times 15% is the same as 115% of $536, which is $536 x 1.15

What the writer has done in the above example is to convert percentages into decimals, not fractions. The problem with the original question has to do with the ambiguous relationships between two different systems: the system of words and the system of numbers. This is the reason that students have difficulty trying to solve story problems that require mathematics to reach a solution.

[Cynth]

Convert percentages to fractions, that should make it easier:

100% = 1.0
200% = 2.0
500% = 5.0
50% = .5
1% = .01

$536 times 15% is the same as 115% of $536, which is $536 x 1.15

What the writer has done in the above example is to convert percentages into decimals, not fractions. The problem with the original question has to do with the ambiguous relationships between two different systems: the system of words and the system of numbers. This is the reason that students have difficulty trying to solve story problems that require mathematics to reach a solution.

Oh no! Story problems! I just remember my dad trying to help me. Every time it started out the same. "Okay, first you write down what you know." "Okay, now you write down what you want to know." Then somewhere in there you figured out what you wanted to know from what you knew. I could start crying right now.

[alurker]

Actually cskinner, in answer to your original question: I think that literally speaking the statement is incorrect. It starts with “If inflation is rising 500 percent a year”. herbivore12 touched on it but generally inflation is expressed as an annual percentage rate (i.e. 5% inflation is an indication that the increase in the general level of prices is 5% over one year. A percentage rise in inflation would be a rise in the rate of price increase.

Let’s say for example that inflation this year is 1%. If “inflation is rising 500 percent a year” then inflation next year will be 1%+(5 times 1%)=6%.

The original statement would be true if it didn’t include the word ‘rising’. It would also be true if it started “If prices are rising 500 percent a year”.

[BillChin]

As an aside, I find it frightening how people can't do relatively simple math or estimates. The people here are WAY above average in intelligence and education and they struggle. There were some radio announcers saying that Warren Buffett's pledge to charity equaled $60,000 USD for each person on earth. The real estimate is $6 USD, a slight difference in what could be accomplished. The guys on the radio are above average in intelligence, but not so good at math.

I don't think we're struggling with the math, but the English, (ie. the terminology of basic economics).

Maybe so. I still believe about over half the adult population can't handle math that involves fractions and percentages. Reading some of the comments here, many from very educated people, confirms my belief. I can only imagine how the average person copes when he/she only has a high school diploma or less. Add in the English reading and grammar element and that takes out another batch from those that can handle the math .

[Lambchop]

Oh no! Story problems! I just remember my dad trying to help me. Every time it started out the same. "Okay, first you write down what you know." "Okay, now you write down what you want to know." Then somewhere in there you figured out what you wanted to know from what you knew.

That's always the trouble spot . . . getting from what you know to what you want to know. It always seems to involve lots of fractions. Big ones. Bleah.

I could start crying right now.

I could, too, but I'd rather just pretend I didn't see this thread. I think we should just go sit by the pool and enjoy a nice fruit drink with one of those little parasols in it.

I'm still sweating over whether the admissions office will give me transfer credit for math. I don't care about physiology or pharmacology, you know--I'll just take the tests and be done with it--but the thought of having to take some kind of . . . math . . . sends me straight back to 9th grade algebra! Aaaugh! Oh, I just can't bear to think about it!