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Tarique Beg · 07-30-2002, 01:59 AM

Susan

I think it would be disingenuous to calculate the percentage as 1000 x 1.5 x 1.2. This is because, in effect, the base on which you are calculating the percentage increments becomes variable, instead of fixed. A mathematically inclined client would assume a fixed base. The reason you get 1800 is because 50 percent of the first base (1000) is 500 plus 20 percent of the second base (1000 + 500) is 300 making a total percentage increment of 800. If your base stayed at 1000, then you'd have 50 percent of 1000 = 500 plus 20 percent of 1000 = 200 for a total increment of 700. In any business transaction as far as I am aware, we always assume a fixed base. Otherwise, the client won't know what they're paying 20 or 50 percent of. Therefore, the calculation of 1000 x (1 + (0.5 + 0.2)) = 1000 x 1.7 is correct. Just my opinion (which could be wrong).

07-30-2002, 01:59 AM	#3
Tarique Beg Juried Member Joined: Oct 2001 Location: Morgan Hill, CA Posts: 38	Susan I think it would be disingenuous to calculate the percentage as 1000 x 1.5 x 1.2. This is because, in effect, the base on which you are calculating the percentage increments becomes variable, instead of fixed. A mathematically inclined client would assume a fixed base. The reason you get 1800 is because 50 percent of the first base (1000) is 500 plus 20 percent of the second base (1000 + 500) is 300 making a total percentage increment of 800. If your base stayed at 1000, then you'd have 50 percent of 1000 = 500 plus 20 percent of 1000 = 200 for a total increment of 700. In any business transaction as far as I am aware, we always assume a fixed base. Otherwise, the client won't know what they're paying 20 or 50 percent of. Therefore, the calculation of 1000 x (1 + (0.5 + 0.2)) = 1000 x 1.7 is correct. Just my opinion (which could be wrong).