Calculations
- Syllabus
- 2026
- Topic
- —
- Level
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Learning objectives
—Percentages and percentage changesCalculate percentages and percentage changes, including interest on savings, in relevant economics contexts.—AveragesCalculate averages, including average cost, in relevant economics contexts.—Revenue, costs and profit totalsCalculate totals, including revenue, costs and profit, in relevant economics contexts.—Gross and net incomeCalculate income, including gross pay and net pay, in relevant economics contexts.
Calculate percentages, changes and savings interest
| Task | Calculation |
|---|---|
| part as a percentage of total | part ÷ total × 100 |
| percentage change | (new − original) ÷ original × 100 |
| simple annual interest | savings × annual rate ÷ 100 × years |
\text{percentage change}=\frac{\text{new value}-\text{original value}}{\text{original value}}\times100
A positive result is an increase; a negative result is a decrease. Always divide a change by the original value, not the new value.
Examples: profit rises from 80,750 to 87,100, so 6,350 ÷ 80,750 × 100 = 7.86%. Interest on ¥8,000 at 2.25% for one year is 8,000 × 0.0225 = ¥180.
A percentage-point change is subtraction between two percentage rates; a percentage change divides that difference by the original rate. They are not interchangeable.
Calculate and interpret economic averages
\text{mean}=\frac{\text{sum of values}}{\text{number of values}}
\text{average cost}=\frac{\text{total cost}}{\text{quantity produced}}
| Average | Numerator | Denominator | Interpretation |
|---|---|---|---|
| mean FDI per year | total FDI across years | number of years | typical annual value over the period |
| GDP per capita | total GDP | population | output per person, not each person's income |
| average cost | total cost | units produced | cost per unit |
Keep units consistent before dividing. If GDP and population are both in millions, the million units cancel; attach the correct currency and per-person or per-unit label to the result.
An average can hide variation across years, people or units. GDP per capita is not the same as median income, and average cost is not total cost.
Build revenue, cost and profit totals
\text{total revenue}=\text{price per unit}\times\text{quantity sold}
\text{total cost}=\text{total fixed cost}+\text{total variable cost}
\text{profit}=\text{total revenue}-\text{total cost}
| Given | Find | Operation |
|---|---|---|
| price and quantity | total revenue | multiply |
| fixed and variable costs | total cost | add |
| revenue and total cost | profit or loss | subtract cost from revenue |
At a price of £12, 500 units give revenue of £6,000. If fixed cost is £1,500 and variable cost is £3,500, total cost is £5,000 and profit is £1,000. A negative profit result is a loss.
Revenue is not profit. Revenue ignores costs; profit is the residual after all relevant costs have been subtracted.
Calculate gross pay and net pay
Gross pay is earnings before deductions. Net pay is the amount received after deductions such as income tax, pension contributions or social-insurance payments.
\text{gross pay}=\text{hourly wage}\times\text{hours worked}+\text{other gross earnings}
\text{net pay}=\text{gross pay}-\text{total deductions}
At €6.04 per hour for 35 hours, weekly gross pay is €6.04 × 35 = €211.40. If deductions total €31.40, net pay is €180.00.
Match the time period first: hourly × weekly hours gives weekly gross pay; annual salary must be divided appropriately before comparison. Add overtime or bonuses before subtracting deductions unless the context says otherwise.
The only exact-tagged Question Bank row, 216041, incorrectly keys €6.04 × 35 as option A. The mathematically correct result is €211.40 (option C), so the row is excluded as representative evidence.
Gross income is not disposable/net income. A deduction reduces take-home pay even though it may finance a benefit such as a pension.