BUSINESS CALCULATIONS

The custom of charging interest on loans must be as old as money itself. Merchants and moneylenders have always tried to make a profit and to relate the profit to the size of transaction; a big deal calls for a big profit.

Roman taxes were usually 1/20, 1/25, or 1/100 of the quantity involved, and these fractions may have led to the practice of working in hundredths, or percentages. During the middle ages calculation of profit or interest as so much in a hundred became the common practice and the phrase per cent was established. This phrase was abbreviated in many different ways; one of the abbreviations was P0c and it is thought that the modern symbol % may have been derived from this.

One of the earliest examples of the phrase ‘per cent’occurs in the Liber Abaci by Leonardo of Pisa, published in 1202, where the author uses it in a problem concerning a merchant who is to sell wool in Florence at a profit of 20 per cent