Lesson 2: Percentages – Profit, Loss, and Interest

👨🏽‍🏫 Introduction

Have you ever bought something on sale, earned interest from your savings, or sold an item for a higher price? These all involve percentages. Percentages help us express parts of a whole in a way that’s easy to compare — out of 100.

In this lesson, you’ll learn how to calculate profit, loss, discounts, and interest — all key skills for money management and exams alike.

By the end of this lesson, you will be able to:

• Convert between percentages, fractions, and decimals
• Calculate profit, loss, and discount using percentages
• Find simple interest using the correct formula

🧠 Key Concepts and Explanations

📌 1. What Is a Percentage?

A percentage is a fraction out of 100. The symbol % means “per hundred.”

Examples:

💰 2. Profit and Loss

• Cost Price (CP): The price an item is bought at
• Selling Price (SP): The price an item is sold at

Profit:

If Selling Price (SP) is greater than Cost Price (CP):

Loss:

If Cost Price (CP) is greater than Selling Price (SP):

Profit or Loss Percentage:

🔖 3. Discounts

A discount is a reduction in the marked price of an item, usually given as a percentage.

Discount =

Price after discount =

🏦 4. Simple Interest

Simple Interest (SI) is money earned or paid for borrowing money over time.

Formula:

Where:

• P = Principal (amount borrowed or invested)
• R = Rate (percentage interest per year)
• T = Time (in years)

🧮 Sample Problem Walkthroughs

1. A phone is bought for ₦10,000 and sold for ₦12,000. Find the profit and profit percentage.
   Profit =
   
   Percentage profit =
   
2. John bought a bag for ₦15,000 and sold it for ₦13,200. What is his loss percentage?
   Loss =
   
   Loss% =
   
3. A shirt marked at ₦6,000 is sold at 25% discount. Find the selling price.
   Discount =
   
   Selling price =
   
4. Find the simple interest on ₦5,000 at 6% per annum for 3 years.
   SI =
   

✍🏽 Practice Exercises

🅰️ A. Profit and Loss

1. A book is bought for ₦2,500 and sold for ₦3,000. Find the profit and profit percentage.
2. A television set is bought for ₦75,000 and sold at a loss of ₦6,000. Find the selling price and the loss percentage.

🅱️ B. Discounts

1. A bag is marked ₦8,000. A shopkeeper gives 15% discount. What is the price after the discount?

🅾️ C. Simple Interest

1. Find the simple interest on ₦12,000 at 5% per annum for 4 years.
2. How much will be paid altogether (principal + interest)?

✅ Answers and Explanations

🅰️ A. Profit and Loss

• A1: Profit = ₦500; Profit% =
  
• A2: SP =
  
  Loss% =
  

🅱️ B. Discounts

• B1: Discount =
  
  Price after discount =
  

🅾️ C. Simple Interest

• C1: SI =
  
• C2: Total =
  

📌 Recap

• ✅ Percentages compare values out of 100
• ✅ Profit or loss is based on the cost price, and can be calculated as a percentage
• ✅ Discounts reduce the marked price using a percentage
• ✅ Simple interest uses the formula
  

💭 Reflection Prompt

Think about the last time you got a discount or saved money in a bank. How did understanding percentages help you make a better financial decision?