Consider this scenario:

Marissa has a job that pays her m dollars an hour. Her manager delivers some good news: Her wages are being raised by 5%. As shown in previous examples, Marissa’s new earnings per hour can be expressed as m + 0.05m because 5% is equal to 0.05. That amount can also be written more compactly as 1.05m .

Marissa’s new earnings can also be written using fractions, however. Because 5% is equal to 120 , think of Marissa’s new earnings per hour as m + 120m , which can be written as m + m20 . The fact that this expression is equivalent to m + 0.05m demonstrates that increasing a number by 5% is the same as multiplying it by 1120 .

1 answer

To recap:

Marissa's new earnings per hour can be expressed as m + 0.05m or 1.05m.
Marissa's new earnings per hour can also be expressed as m + 120m or m + m/20.
Both expressions are equivalent and demonstrate that increasing a number by 5% is the same as multiplying it by 1.05 or 1120.