Converting Percentages to Decimals

A per cent is a fractional expression which has a denominator of 100. Hence, one per cent (1%) is $\frac{1}{100}$ (one one hundredth) of a unit.

Percentages have a wide range of application in accounting as they are helpful to make comparisons meaningful and easily understood. For example, on a balance sheet each asset is shown as a percentage of the total assets. Another example would be some of the key accounting ratios, which are also expressed as percentages.

To use percentages in an arithmetic application, they must first be changed to a decimal or a fraction. To do this, remove the per cent sign (%) and move the decimal two places to the left.

For example:

7% = 0.07

65 ½% = 65.5% = 0.655

To convert a percentage to decimal using a calculator, do the following:

  1. Type in the percentage amount, e.g. 70
  2. Press the division button, e.g. ÷
  3. Type in 100
  4. Press the equal button
  5. You should now have the percentage expressed as a decimal

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