Do I divide by the cost price or the selling price for profit per cent?

Always the cost price — the amount the trader paid. Dividing by the selling price is one of the most common exam mistakes.

What is the difference between simple and compound interest?

Simple interest is paid only on the original amount. Compound interest is also paid on the interest already earned, so the savings grow faster.

Topic guide · JSS 1, JSS 2, JSS 3, SS 2, SS 3

Percentages & Financial Maths

Percentages explained with naira examples: percentage of a quantity, increase and decrease, profit and loss per cent, simple and compound interest.

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Percentages & Financial Maths explained

Per cent means 'out of 100', so 15% is the same as 15100. Percentages let us compare amounts fairly — a ₦500 discount means a lot on a ₦2,000 bag but very little on a ₦200,000 laptop.

Percentages are everywhere in real life in Nigeria: shop discounts, transport fare increases, a trader's profit, bank interest on savings and the interest charged on loans. They are also some of the most common questions in BECE and WASSCE papers.

Key ideas to remember

x% of an amount = x/100 × the amount.
Profit or loss per cent is always worked out on the COST price: profit ÷ cost price × 100.
Simple interest: I = PRT ÷ 100 (P = principal, R = rate per year, T = time in years).
Compound interest earns interest on the interest: A = P(1 + r/100)ⁿ.
To share in a ratio, add the parts, find the value of one part, then multiply.

Worked example

A shop gives a discount of 10% on a textbook that costs ₦6,000. How much is the discount?

Step 1: Write the percentage as a fraction
10% of ₦6,000 = 10100 × 6,000
Step 2: Work it out
= ₦600

Final answer: ₦600

Practice questions

Have a go, then open the answer to check your working. Every answer was checked by the MathPlug maths engine.

Question 1
The price of a bag of cement was ₦5,000. It increased by 20%. What is the new price?
- A₦5,020
- B₦4,000
- C₦1,000
- D₦6,000
Show answer and working
1. Step 1: Find 20%
  20100 × 5,000 = ₦1,000
2. Step 2: Add the increase
  ₦5,000 + ₦1,000 = ₦6,000
Final answer: ₦6,000
Question 2
A trader bought a radio for ₦5,000 and sold it for ₦6,250. Find the profit per cent.
- A20%
- B30%
- C1,250%
- D25%
Show answer and working
1. Step 1: Find the profit
  ₦6,250 − ₦5,000 = ₦1,250
2. Step 2: Divide by the cost price
  12505000 × 100 = 25%
  Why? Profit and loss percentages are always compared with what the trader paid.
Final answer: 25%
Question 3
₦18,000 is shared between Chidi and Aisha in the ratio 2 : 7. How much does Chidi get?
- A₦4,000
- B₦14,000
- C₦9,000
- D₦2,000
Show answer and working
1. Step 1: Total parts
  2 + 7 = 9 parts
2. Step 2: Value of one part
  ₦18,000 ÷ 9 = ₦2,000
3. Step 3: Chidi's share
  2 × ₦2,000 = ₦4,000
Final answer: ₦4,000

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Frequently asked questions

Do I divide by the cost price or the selling price for profit per cent?: Always the cost price — the amount the trader paid. Dividing by the selling price is one of the most common exam mistakes.
What is the difference between simple and compound interest?: Simple interest is paid only on the original amount. Compound interest is also paid on the interest already earned, so the savings grow faster.