A percentage (%) is a way of expressing a quantity as a fraction of 100. Saying "15%" means "15 out of every 100". It is the most widely used unit in finance: returns, inflation, interest rates, and fees are always expressed as percentages.
The three basic operations with percentages:
- Calculating X% of a value → value × percentage ÷ 100. Example: 15% of $220 = $220 × 15 ÷ 100 = $33.
- Expressing a quantity as a percentage of another → (part ÷ total) × 100. Example: $33 out of $220 = ($33 ÷ $220) × 100 = 15%.
- Calculating a change → ((new value − previous value) ÷ previous value) × 100. Example: price rises from $88 to $110 → (($110 − $88) ÷ $88) × 100 = 25% increase.
⚠️ Important
All three are the same formula applied in different ways. In investing you would use them constantly: to know how much you gain, how much you lose, or how much a fee represents on your capital.