Well, let's forget about the percentage sign for a second and pay attention to 3 1/8, which is commonly referred to as a "mixed" number. We can think of this as 3 wholes added to 1/8, or 3 + 1/8. We can also think of 3 as 3/1.
So now we have
3 + 1/8 = 3/1 + 1/8.
Let's bring to a common denominator, which is usually the greatest common factor of the two denominators. The gcd(1,8) is 8. Now, multiply 3/1 by 1 = 1/1 = 8/8. Now, 3/1 * 8/8 = 24/8.
We can add the two fractions: 24/8 + 1/8 = 25/8.
Now, about that percentage sign. A percent means "out of 100." For example, when you have 2% you are saying 2/100. 3 1/8 % means, (3 1/8) / 100. Since we converted 3 1/8 to 25/8, this is actually (25/8)/100.
This simplifies to: (25/8)/100 = 25/(8*100) = 1/8 * 25/100 = 1/8 * 1/4 or 1/(4*8) = 1/32.
A simplest fraction is a fraction of the form a/b where a and b share no factors other than 1. And 1/32 is the simplest fraction you can get.
I hope this helps.
