Percentages

• Reverse Percentages


  • Used to calculate an original amount given the final amount and the percentage increase or decrease
  • Involves reversing the percentage calculation to find the original value
• Appreciation


  • Refers to the increase in value of an asset over time
  • Examples of appreciating assets include property, collectibles, limited edition items, etc.
• Compound Interest


  • Interest earned on a sum of money is added to the original amount each year
  • Results in earning interest on the interest, leading to exponential growth of the total amount over time
• Calculating Appreciation/Compound Interest


  1. Convert the percentage rate to a decimal

  2. Calculate the appreciation multiplier by adding 1 to the rate

  3. Determine the future value using the appreciation multiplier and time period
• Depreciation


  • Refers to the decrease in value of an asset over time
  • Examples of depreciating assets include cars, smartphones, electronics, etc.
• Calculating Depreciation


  1. Convert the percentage rate of depreciation to a decimal

  2. Calculate the depreciation multiplier by subtracting the rate from 1

  3. Determine the future value using the depreciation multiplier and initial value