GENERAL MATHEMATICS
LEARNING MATERIAL 2: APPLYING PERCENTAGE INCREASE AND DECREASE
IN VARIOUS CONTEXTS
Learning Target: Apply a percentage increase or decrease in various contexts;
a) determining the impact of inflation on costs and wages over time
b) calculating percentage mark-ups and discounts
c) calculating VAT
d) calculating profit or loss in both absolute and percentage terms.
PERCENTAGE IN VARIOUS CONTEXT
1. Understanding Percentage Change
a. Introduction to Percentage Increase and Decrease
Percentage change indicates the extent to which a quantity has increased or decreased in
relation to its original value. It is often utilized in finance, sales, budgeting, and data analysis.
b. Formula for Calculating Percentage Change
𝑁𝑒𝑤 𝑉𝑎𝑙𝑢𝑒 − 𝑂𝑙𝑑 𝑉𝑎𝑙𝑢𝑒
𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝐶ℎ𝑎𝑛𝑔𝑒 = × 100
𝑂𝑙𝑑 𝑉𝑎𝑙𝑢𝑒
• If the result is positive, it indicates a percentage increase.
• If the result is negative, it indicates a percentage decrease.
c. Interpreting Positive and Negative Percentages
• +15%: The value increased by 15% from the original.
• -10%: The value decreased by 10% from the original.
Example 1*:
1. Old Price: ₱600, New Price: ₱650 → Increase of 8.33%
2. Enrollment: 500 last year, 550 this year → Increase of 10%
3. Stock value: ₱120 down to ₱90 → Decrease of 25%
4. Rent: ₱15,000 to ₱16,500 → Increase of 10%
5. Savings: ₱8,000 to ₱7,200 → Decrease of 10%
*Practice Test 1. Write a solution for each example in set 1.
Page 1 of 4
2. Inflation and Its Effects
a. What is Inflation?
Inflation is the general increase in prices of goods and services over time, resulting in
decreased purchasing power.
b. How Inflation Affects the Cost of Goods
When inflation occurs, everyday items like rice, bread, or gasoline become more expensive,
meaning your money buys less.
c. Adjusting Wages for Inflation
To maintain the same standard of living, wages need to increase at a rate like inflation. If
wages stay the same while prices rise, people effectively earn less.
d. Rate of Inflation
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑃𝑟𝑖𝑐𝑒 − 𝑃𝑟𝑒𝑣𝑖𝑜𝑢𝑠 𝑃𝑟𝑖𝑐𝑒
𝑅𝑎𝑡𝑒 = × 100
𝑃𝑟𝑒𝑣𝑖𝑜𝑢𝑠 𝑃𝑟𝑖𝑐𝑒
Example 2**: Price Comparisons
1. Rice: ₱40/kg (2020) → ₱55/kg (2024) → 37.5% increase
2. Jeepney fare: ₱9 to ₱12 → 33.33% increase
3. Milk: ₱80 to ₱100 → 25% increase
4. Eggs: ₱6 each to ₱8 each → 33.33% increase
5. Minimum wage: ₱500 to ₱570 → 14% increase
**Practice Test 2. Write a solution for each example in set 2.
3. Mark-ups and Discounts in Business
a. Difference Between Cost Price and Selling Price
Cost Price (CP): Original price paid to acquire or produce a product
Selling Price (SP): Price at which the product is sold to customers
b. Computing Mark-up Percentage
𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 − 𝐶𝑜𝑠𝑡 𝑃𝑟𝑖𝑐𝑒
𝑀𝑎𝑟𝑘 − 𝑈𝑝 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 = × 100
𝐶𝑜𝑠𝑡 𝑃𝑟𝑖𝑐𝑒
Page 2 of 4
c. Calculating Final Prices After Discounts
𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡𝑒𝑑 𝑃𝑟𝑖𝑐𝑒 = 𝑂𝑟𝑖𝑔𝑛𝑎𝑙 𝑃𝑟𝑖𝑐𝑒 × (1 − 𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡 𝑅𝑎𝑡𝑒)
Example 3***:
1. CP: ₱80, SP: ₱100 → 25% mark-up
2. CP: ₱120, SP: ₱150 → 25% mark-up
3. SP: ₱1,000, 20% discount → Final Price: ₱800
4. SP: ₱2,000, 15% then 10% successive discounts → ₱2,000 × 0.85 × 0.90 = ₱1,530
5. CP: ₱200, Mark-up: 30% → SP = ₱260
***Practice Test 3. Write a solution for each example in set 3.
4. Value Added Tax (VAT)
a. What is VAT and How It Is Applied
VAT is a 12% tax added to the price of goods and services in the Philippines. Businesses
collect VAT from customers and remit it to the government.
b. Calculating VAT-Inclusive and VAT-Exclusive Prices
To find VAT-inclusive price:
𝑉𝐴𝑇 𝐼𝑛𝑐𝑙𝑢𝑠𝑖𝑣𝑒 𝑃𝑟𝑖𝑐𝑒 = 𝑉𝐴𝑇 𝐸𝑥𝑐𝑙𝑢𝑠𝑖𝑣𝑒 𝑃𝑟𝑖𝑐𝑒 × 1.12
VAT-Inclusive Price to VAT-Exclusive:
𝑉𝐴𝑇 𝐸𝑥𝑐𝑙𝑢𝑠𝑖𝑣𝑒 𝑃𝑟𝑖𝑐𝑒 = 𝑉𝐴𝑇 𝐼𝑛𝑐𝑙𝑢𝑠𝑖𝑣𝑒 𝑃𝑟𝑖𝑐𝑒 ÷ 1.12
To Find VAT Amount:
𝑉𝐴𝑇 𝐴𝑚𝑜𝑢𝑛𝑡 = 𝑉𝐴𝑇 𝐼𝑛𝑐𝑙𝑢𝑠𝑖𝑣𝑒 𝑃𝑟𝑖𝑐𝑒 − 𝑉𝐴𝑇 𝐸𝑥𝑐𝑙𝑢𝑠𝑖𝑣𝑒 𝑃𝑟𝑖𝑐𝑒
Example 4:
1. VAT-inclusive: ₱112 → Exclusive = ₱100, VAT = ₱12
2. VAT-inclusive: ₱560 → Exclusive = ₱500, VAT = ₱60
3. VAT-exclusive: ₱1,200 → VAT = ₱144, Total = ₱1,344
4. VAT-inclusive: ₱1,680 → Exclusive = ₱1,500, VAT = ₱180
5. VAT-inclusive: ₱896 → Exclusive = ₱800, VAT = ₱96
Page 3 of 4
****Practice Test 4. Write a solution for each example in set 4.
Practice Test 5. Analyze and solve the following problems.
Problem 1. Mariel is buying the following school items at a bookstore's back-to-school sale:
• Notebook: ₱60 (20% off)
• Ballpen set: ₱120 (10% off)
• Backpack: ₱850 (25% off)
a. Calculate the total discount for all items.
b. Determine the final amount Mariel pays.
Problem 2. A store sells a calculator for ₱1,344, which is VAT-inclusive (12%).
a. What is the VAT-exclusive price of the calculator?
b. How much VAT is included in the price?
Problem 3. Jomar bought 10 sets of pencils for ₱150 (₱15 each). He planned to sell each set at
₱20, but to sell faster, he reduced the price to ₱13.
a. Calculate his total sales.
b. Did he gain or lose money? By how much (absolute and percentage)?
c. What should the selling price have been to earn a 30% profit?
Problem 4. In 2020, a school lunch cost ₱50. By 2024, the same meal costs ₱70. Meanwhile, a
learner’s weekly allowance increased from ₱300 to ₱360.
a. Calculate the percentage increase in lunch cost.
b. Calculate the percentage increase in allowance.
c. Based on this, is the allowance increase enough to keep up with lunch inflation?
Problem 5. Your class is organizing a learner council planning event with a ₱5,000 budget. You
must prepare cost estimates for:
Food: Prices from 2022 were ₱2,000. Assume a 10% inflation.
Materials: Original cost ₱1,200. Available with 15% discount.
Services (printing/sound system): Quoted price ₱1,500 (VAT-inclusive).
You will sell custom keychains at ₱75 each. They cost ₱50 to make.
a. Adjust the food price using inflation.
b. Compute the discounted price of materials.
c. Determine the VAT-exclusive cost of services.
d. If you sell 30 keychains, compute total profit and how it can support the event.
Page 4 of 4
