My iPhone 4 battery percentage freezes

I got my iPhone for christmas and it was working fine at first then the battery percentage stopped working. I woke up one morning to find that it hadn't charged past 39%. I turned restarted it and it changed to 85% then moved to 94% two minutes later. Soon later i turned it off again because it was stuck on 94% and it had gone to 73% but then jumped back to 89%.

I have reset it and restored it many times and I have also let my battery drain twice. Also when charging when it has about 10% battery the icon in the battery sign is a plug instead of a lightening bolt. After a while it changes to a lightening bolt but then when the percentage changes to 73% after i have reset the phone it turns into a plug sign.

Is this normal behaviour and I just want to know what the problem is.