Numerical Reasoning

Formulas
Although taking a numerical reasoning test is not the same as taking a maths
exam, in order to succeed on a numerical test you will need to have
mastered some basic maths skills.

Numerical tests usually target the following mathematic skills:

1. Addition
2. Subtraction
3. Multiplication
4. Division
5. Averages
6. Percentages
7. Ratios

More advanced calculations, such as averages, percentages and ratios can

become simpler with the use of specific formulas. Such is the case with
algebraic questions that involve rate problems (work/ speed/ distance/ time)
as well as financial-oriented problems.

In this PDF we offer a short guide to basic as well as advanced formulas that
you are expected to be able to apply in your numerical test. We will focus on
the following subjects:

1. Averages
2. Percentages
3. Ratios
4. Rate formulas
5. Finance

Let's Get Started!

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Averages

Average
Definition: A calculated “central” value of a set of numbers.

Sum of items
Average =
Number of items

∑x
̅=
X
n

Weighted average
Definition: A calculated “central” value of a set of numbers, in which each
value or set of values is assigned a different weight.

Sum of observations × weight

Weighted average =
Sum of weights

∑ x ∗ wi
̅w =
X
∑ wi

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Percentages

Percentages and fractions

Definition: A percentage is a part of a whole, where the whole is defined as
100. A fraction is a part of a whole, where the whole can be any number.

% = (fraction) × 100

 Note that when dealing with percentages it is sometimes easier to convert

them into decimals and use the decimals in percentages calculations. For
example, 50% = 0.5; 120% = 1.2; 11% = 0.11 etc.

Calculating a percentage

𝑉𝑎𝑙𝑢𝑒
%=( ) × 100
𝑇𝑜𝑡𝑎𝑙

For example, if you own 20 company shares and the total number of shares is
20
400, this means you own: (400) × 100 = 5% of the shares.

Percentage Increase/Decrease

% Increase:

New value = (1 + Increase) × (Original amount)

% Decrease:

New value = (1 − Decrease) × (Original amount)

For example, if a shirt cost £30 and a week later was offered at a 15%
discount, how much does the shirt cost? (1 − 0.15) × 30 = 0.85 × 30 = £25.5

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Calculating Percentage Change

Definition: Percentage change refers to the relative percent change of an

increase or decrease in the original amount.

New amount−Original amount

% Increase: × 100
Original amount

Original amount−New amount

% Decrease: × 100
Original amount

For example, if a shirt cost £30 and a week later was offered for the price of
30−24
£24, what was the discount on that shirt? ( 30
) × 100 = 20%

Note: Percentage change is different from absolute change. While

percentage change is calculated in relation to the original amount, absolute
change is calculated as an absolute amount. In other words, it is not divided
by the original amount.

Calculating Percentage Difference

Definition: Percentage difference refers to the relative percent change in a
certain amount, when you are not able to determine which amount is the
original one.

First amount − Second amount

| | × 100
(First amount + Second amount)/2

For example, “Molly's designs” gets 200 customers a week while “Best wear”
gets 240 customers. What is the percentage difference in customers between
200−240 −40 −40
the two stores? |(200+240)/2| × 100 = |440/2| × 100 = | 110 | × 100 = 𝟑𝟔. 𝟑%

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Reversed Percentages

New amount
% Increase: Original amount = (1+Increase)

New amount
% Decrease: Original amount = (1−Decrease)

For example, if a shirt costs £33 after a 20% increase in price, how much did
33 33
it cost prior to the price change? = = £27.5.
1+0.2 1.2

Percentage Points

Definition: Percentage points refer to an increase or decrease of a

percentage. This is an absolute term (in contrast to percentage
change/difference).

Percentage points difference = New percent − Old percent

Ratios

Definition: The relative size of two or more values. The values are usually
separated by a colon sign.

a:b is a given ratio.

N is the total sum of items.
a
The number of a items = ( )×N
a+b

For example, there are 70 red and blue marbles in a jar. The ratio of red to
blue marbles is 3:4. How many red marbles are there?
3 3
( ) × 70 = × 70 = 30 𝑟𝑒𝑑 𝑚𝑎𝑟𝑏𝑙𝑒𝑠
3+4 7

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Rate Formulas

What are rate problems?

A rate is a mathematical way of relating two quantities, which are usually
measured in different units. Rate problems usually involve three variables
such as speed/distance/time or product/time/number of workers etc. You are
usually given 2 variables and are required to find the missing variable
according to the data given in the question.

Speed: S =V ×T S=distance; V= velocity; T = time

Work: W =P ×T W= work; P = power; T = time

For example, Jill drove across a 0.3 mile long bridge. The time it took her car
to travel from one side to the other was 20 seconds. How fast was Jill
0.3
driving? 0.3 = V × 20  V =  V = 0.015 Miles per second
20
(or 0.9 miles per minute).

Finance

Fixed and variable costs: Fixed costs are set expenses a company has which
never change and variable costs are costs that vary depending on a
company's production volume.

Total cost = Fixed costs + Variable costs

For example, if the rent a pencil company pays for its offices is £100 per
month, each pencil costs them £0.10 to make, and they make 100 pencils
each month, what is the company's total monthly cost?
𝑇𝑜𝑡𝑎𝑙 𝑐𝑜𝑠𝑡 = 100 + (0.10 × 100) = 100 + 10 = £110

Return Of Investment: measures the profitability of an investment expressed

as a percentage.

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 Gain − Cost
ROI = × 100
Cost

Profit margin: measures how much out of every dollar of sales a company
actually keeps in earnings.

Gross profit
Profit margin =
Total revenue

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