Financial Maths

Explore profit and loss, simple and compound interest, depreciation, VAT and best-buy comparisons using realistic calculations.

Curriculum rangeYears 7–11

Cost price (£)

Selling price (£)

Bought for £40, sold for £52.

$\text{Profit}=\text{selling price}-\text{cost price}=\pounds 52-\pounds 40=\pounds 12$ .

As a percentage, always compare to the cost price: $\dfrac{\pounds 12}{\pounds 40}\times100$ .

$\text{Profit}:30\%$

Learning notes

Financial Maths essentials

Keep these rules beside you while you explore and practise.

1Percentage multipliers

\text{Increase by }r\%=\times\left(1+\dfrac r{100}\right)

\text{Decrease by }r\%=\times\left(1-\dfrac r{100}\right)

2Profit and loss

\text{Profit}=\text{selling price}-\text{cost price}

Percentage profit or loss is compared with the original cost price.

3Simple interest

I=Prt\qquad A=P+I

Write r as a decimal rate per time period. Simple interest is always a percentage of the original principal.

4Compound interest and depreciation

\text{Final value}=P\times(1\pm r)^n

Use + for growth (compound interest) and − for decay (depreciation). Unlike simple interest, each period's change is a percentage of the running total, not the original amount.

5Best buys

Compare like with like by finding a unit price, such as cost per item, kilogram or litre.

💡Reverse percentage: divide by the multiplier to recover the original amount; do not subtract the percentage.