[RAILhead]

Okay, this PayPal math is kicking my butt. The "knowns" I will play with are 2.9% + .30.

So, in order for me to end up receiving $500 while passing the PayPal fees to a buyer, I would do:
(500 * .029) + .30 = 14.80, for a total of $514.80. Right?


Well, so the guy sends me $514.80 -- but I'm not getting $500 according to my math, I'm getting:
(514.8 * .029) + .3 = $15.23, for a total of $499.57.


What's up with that? I know the second "math" is what it is because it's taking 2.9% from a larger number, thus a larger portion is coming out of the whole.

An obvious "workaround" is to simply bump the percent to 3, forgetting 2.9 -- but I'm wondering how this is supposed to balance out. Is this just a sneaky way for PP to make just a little bit more off everyone, and after all these years, I'm just now seeing it?

Is my math wrong?

[skipjack]

The first equation is wrong. You want

Net amount = BuyerPays -[ (BuyPays * 0.029) + 0.30]

$500 = BuyerPays*0.971 - 0.30
X = 500.3 / 0.971 = $515.24

[RAILhead]

Where the heck did .971 come from?

[RAILhead]

Let me rephrase:

Why must you do the 1 - .029 thing? Why can't you just multiply by .029?

[mduell]

Use easier numbers to see. Say the fee was 10% and the price is $100.

10% of $100 is 10, so you'd say pay you $110.
But 10% of 110 is $11, so you'd only net 99.

OTOH 100/(1-.1) is 111.111111. 10% of 111.111111 is 11.1111111, so you'd get your $100 net.

[Oisín]

Originally Posted by RAILhead 

Where the heck did .971 come from?

1 - 0.029 (i.e., 100% - 2.9%).

[RAILhead]

Okay, let's use 500.

If I wanted to find out what 2.9% of 500 is, I was taught to multiply 500 by .029, so:
500 x .029 = 14.5

If I'm understanding you guys correctly, you're saying to do:
500 / (1-.029) or...
500 / .971 = 514.93

That's 14.93, not 14.5.

[skipjack]

Yes, 2.9% of $500 is $500 * 0.029.

However, the question is, what number, minus 2.9% of that number, will give you $500.

That is, you want the final number to be $500.

Since you are multiplying what the buyer pays, which is more than $500, by 2.9%, as you have shown, there is more deducted from what the buyer, therefore you have to figure out how much more the buyer must pay.

As you have shown
(514.8 * .029) + .3 = $15.23, for a total of $499.57

So, you can add $0.43 and try again:
(515.23*0.29) + .3 = $15.24, for a total of $499.99

Adding $0.01 and trying again:
(515.24*0.29) + 0.3 = $15.24, for a total of $500.

So, just consider the 1 / (1.00 - 0.029) to be a shortcut.

[Sealobo]

holy ****... you guys are kidding right?

500 = (1-0.029) * X - 0.30

solve for X.

X = $515.242

[Oisín]

What skipjack said.

What you’re doing, RAILhead, is basically a finished equation: 2.9% of 500 = X. So X = 14.5. That’s not very useful, ’cause if you add that to the original $500 and then subtract the 2.9% fee, you end up with 97.1% of 514.5 = Y or Y = 499.5795. In other words, you’d be paid about 42¢ too little.

What you need to do is a different equation: X - 2.9% of X = 500 or 97.1% of X = 500. You need to find out what X is in the equation X * 0.971 = 500, which means you need to perform the opposite function [function? that’s not the right word, is it?] on both sides and do X * 0.971 / 0.971 = 500 / 0.971, which, since multiplication and division cancel each other out, is the same as saying X = 500 / 0.971.

(Jesus, I’m glad I’m not a math book writer)

[RAILhead]

SNAP! Crap, that's the freakin' deal!

I actually, totally, 100% get all of this now.

THANKS, dudes!

Originally Posted by skipjack 

Yes, 2.9% of $500 is $500 * 0.029.

However, the question is, what number, minus 2.9% of that number, will give you $500.

That is, you want the final number to be $500.

Since you are multiplying what the buyer pays, which is more than $500, by 2.9%, as you have shown, there is more deducted from what the buyer, therefore you have to figure out how much more the buyer must pay.

As you have shown
(514.8 * .029) + .3 = $15.23, for a total of $499.57

So, you can add $0.43 and try again:
(515.23*0.29) + .3 = $15.24, for a total of $499.99

Adding $0.01 and trying again:
(515.24*0.29) + 0.3 = $15.24, for a total of $500.

So, just consider the 1 / (1.00 - 0.029) to be a shortcut.

[hyteckit]

I guess 7th grade algebra is useful in the real world after-all.

[RAILhead]

Okay -- hold on, now. I need a bit more explanation about *why*...

If the formula is:
500 = n * (1 - .029) - .3

Can someone explain why you have to do the 1-.029? I understand that it's 100%-2.9%, but my mathematically-challenged brain doesn't understand why I should know to do 1-.029, as opposed to just .029...

Does that make any sense?

[turtle777]

Ok, so let's say the number you're looking for is X.

You know that you want to deduct 2.7% (0.027) from X.
You gotta think of X as 100%, not as the $500 as 100%.

Since you deduct 2.7% from X (the 100%), what's left is 97.1%, which equals the $500.

So, if

X = 100%
$500 = 97.1%

the mathematical operation to get X is $500/97.1%*100%

Or, in other words, $500/0.971
Or, yet in other words, $500/(1-0.029)

I dunno if that helps.

-t

[RAILhead]

Yep, that's what I was thinking -- just wanted to make sure I was understanding it correctly! Thanks, mein kapitan!!!1!

[turtle777]

Bitte sehr

-t

[jokell82]

Or skip all this and just go here: The Fee Calculator - Calculates PayPal service fees and charges

Or here: PayPal Fee Calculator by Ryan Olbe

[RAILhead]

No, that doesn't do anything to explain WHY.