Being comfortable with percentages and decimals is one of those small math skills that quietly makes your financial life easier. You’ll see them everywhere interest rates, credit cards, savings accounts, discounts, and loan calculators.
If you’ve ever wondered what a “5% interest rate” actually means in dollars, or how a “20% off” sale affects the final price, this guide is for you. No math background needed we’ll keep it simple.
Turning a Percentage Into a Decimal
Most financial numbers are advertised as percentages. But when you actually calculate something on a calculator, spreadsheet, or phone you usually need a decimal.
Method 1: Divide by 100
The most straightforward method is to divide the percentage by 100.
Example:
75% → 75 ÷ 100 = 0.75
That’s it. Once you divide by 100, you’re ready to plug the number into a calculation.
You can do this on any calculator, or even by typing something like 75/100 into Google.
Method 2: Move the Decimal Two Places Left
There’s a quicker mental shortcut: move the decimal point two spaces to the left.
If you don’t see a decimal, imagine one at the end of the number.
Examples:
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75% → 0.75
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100% → 1.00
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150% → 1.5
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0.5% → 0.005
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75.435% → 0.75435
After a bit of practice, this method becomes second nature.
Real-Life Example: Savings Account Interest
Let’s say your bank offers 1.25% APY on a savings account. You deposit $100 and leave it there for a year. How much interest will you earn?
First, convert the percentage to a decimal:
1.25% → 0.0125
Now multiply:
0.0125 × $100 = $1.25
So for every $100 you keep in the account, you earn $1.25 in a year (assuming the rate doesn’t change).
Real-Life Example: Store Discounts
Imagine a jacket normally costs $45, but it’s on sale for 30% off.
Convert the discount to a decimal:
30% → 0.30
Now calculate the savings:
0.30 × $45 = $13.50
Subtract that from the original price:
$45 − $13.50 = $31.50
You’d pay $31.50 and save $13.50.
Converting a Decimal Back Into a Percentage
Sometimes you’ll see numbers written as decimals especially in spreadsheets or loan calculators and you’ll want to turn them into percentages.
Just reverse the process.
Method 1: Multiply by 100
Example:
0.75 × 100 = 75%
Method 2: Move the Decimal Two Places Right
Example:
0.75 → 75%
Both methods give the same result. Use whichever feels easier.
Why This Matters in Personal Finance
Quick calculations like these are great for estimates but they don’t always tell the full story.
Example: Mortgage Interest (The Big Picture)
Suppose you take out a $100,000 mortgage with a 6% annual interest rate.
A rough estimate looks like this:
6% → 0.06
0.06 × $100,000 = $6,000
That suggests you’ll pay about $6,000 in interest per year. But that’s not exactly how real loans work.
With most mortgages and car loans, your monthly payment gradually reduces the loan balance. Because the balance gets smaller over time, the interest you owe also shrinks. This repayment process is called amortization.
In reality, your first-year interest on that loan would be slightly lower than $6,000 not exact, but close enough for a quick estimate.
If you need precise numbers, that’s when amortization schedules or online loan calculators come in handy.
Common Questions
How do you convert a fraction to a percentage?
First, turn the fraction into a decimal by dividing the top number by the bottom number. Then multiply by 100.
Example:
3 ÷ 4 = 0.75 → 75%
How do you round a decimal to the nearest tenth of a percent?
A tenth of a percent equals 0.001 in decimal form.
Look at the fourth number after the decimal:
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If it’s 5 or higher, round up
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If it’s 4 or lower, round down
Examples:
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0.0015 → 0.002
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0.0014 → 0.001
