GCSE-readyEconomics calculations: interest, pay, averages and percentages
Around 10% of the marks in International GCSE Economics come from calculations, always set in a real context. These are the methods you need.
Percentages and percentage change
Percentage change = (new − old) ÷ old × 100. If a price rises from $40 to $46: 6 ÷ 40 × 100 = 15%.
A fall gives a negative answer: $50 to $45 is −10%.
To increase an amount by 5%, multiply by 1.05; to decrease it by 5%, multiply by 0.95.
Interest on savings
Saving $2400 at 3.5% a year earns 2400 × 3.5 ÷ 100 = $84 in the first year.
If the interest is added and left in the account, the next year's interest is paid on the bigger amount: after 2 years the saver has 2400 × 1.035 × 1.035 = $2570.94.
Higher interest rates reward saving, which is one reason people spend less when rates rise.
Gross pay and net pay
Net pay (take-home pay) = gross pay − deductions. Deductions can include income tax, social security contributions (such as National Insurance in the UK) and pension contributions.
| $ | |
|---|---|
| Basic pay: 37 hours × $14 | 518.00 |
| Overtime: 4 hours × $21 | 84.00 |
| Gross pay | 602.00 |
| Income tax | (61.40) |
| Social security contributions | (42.75) |
| Pension contribution | (28.10) |
| Net pay | 469.75 |
Averages and totals
Average (total) cost = total costs ÷ output.
Total revenue = price × quantity; total costs = total fixed costs + total variable costs; profit = total revenue − total costs.
A worker is paid $16 an hour for 35 hours. Deductions are income tax $52 and social security $38. Find gross pay and net pay.
- Gross pay = 35 × 16 = $560
- Deductions = 52 + 38 = $90
- Net pay = 560 − 90 = $470
Answer: Gross $560; net $470
Percentage change = (new − old) ÷ old × 100. Interest = amount × rate ÷ 100. Gross pay is before deductions; net pay = gross pay − deductions such as income tax. Mean = total ÷ number of values; average cost = total costs ÷ output.
- Percentage change
- (new value − old value) ÷ old value × 100
- Net pay
- gross pay − deductions (such as income tax and other contributions)
- Average
- total of the values ÷ number of values
- Average cost
- Total cost divided by output: the cost of making one unit.
- Interest rate
- The cost of borrowing and the reward for saving.
- Fixed costs
- Costs that do not change with output in the short run, such as rent.
All International GCSE Economics key terms and definitions →
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Kofi saves $8000 at an interest rate of 3% a year. How much interest does he earn in one year?
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Answer: 240
3% × $8000 = $240.
A worker earns $11.50 an hour and works 30 hours a week. What is their weekly gross pay?
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Answer: 345
$11.50 × 30 = $345.
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- Pearson Edexcel International GCSE Economics (4EC1) specification, topic Appendix 3: quantitative skills
- Pearson Edexcel International GCSE Economics 4EC1 specification, Appendix 3
Checked by the GCSE-ready editorial team, 16 October 2026. Last updated 2 October 2026. Spotted a mistake? Tell us and we will fix it.