Tuesday, November 12, 2013

Approximating a percentage.

Question:  You are gleaning a report and see that recent U.S. GDP is $16,535 billion and recent U.S. exports are $2195.9 billion.  You don’t have a calculator and don’t want to divide.  

Approximate U.S. exports as a percent of U.S. GDP.

Approximation:   Note that 10% of GDP is $1,653 billion.  Since exports are $2,195 billion the answer is a bit above 10%.

How much above 10%?

Note that 1.0% of GDP is $165 billion.

($2195-1,653) is a bit over 500.  165 goes into 500 a bit more than 3 times.

I get around 13%, maybe a bit more.

It is useful to be able to get quick approximations.  

Hope this is helpful.

It may have been easier to divide each number by 1000.  Change $2195 to $2.2 and $16,535 to $16.5.  Take 10% of $16.5 and get 1.65.  (Note that (2.2-1.65) is around 5.7.  I am closer to 13.5 this time.  

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