Brian is opening a small sporting goods store. After considering her market, she sets her initial sales goal at $32,000 a month. He knows that the rent for his store should be about 8% of sales. Approximately what should he plan to pay for rent, based on the sales figure given?
Explanation
Answer: 8% of $32,000 is $2,560.
A mental shortcut for multiplying by 8 is to multiply the number by 10, then subtract the original number twice. In this example, multiply 32,000 by 10, which equals 320,000. Then subtract 32,000 twice (320,000 - 32,000 = 288,000; 288,000 - 32,000 = 256,000).
Remember, that you are considering 8 percent, so move the decimal point two places to the left, to reach an answer of $2,560. We know this is a reasonable answer because 10% of $32,000 would be $3,200, so the answer is only slightly less than that.
Key Takeaway: It is easy to calculate percentages that are near 10%. To multiply by seven
(to find 7% of a number), for example, you would multiply by 10, then subtract the original number three times. To multiply by twelve (to find 120%), you would multiply by 10, then add the original number twice.
