If your current salary is the 100%, and you get a 2.5% increase, that means the new salary would be 102.5% of 25,000. This percentage could also be written as 1.025, which you would multiply to 25,000 to get your new salary.
1.025 · 25,000 = 25,625
Therefore, your new salary would be $25,625
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20% is one fifth of 100%.
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