Percentage increase is a fundamental concept used to express the extent to which a quantity has gained value over a specific period. It's a relative measure, offering more insight than absolute change alone. For instance, knowing that your investment portfolio increased by $1,000 is less informative than knowing it increased by 10%, because it relates the change to the initial investment. Understanding how to calculate percentage increase is useful in many real-world situations, from finance and business to everyday life.
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Calculate Percentage Increase Now →The Percentage Increase Formula
The formula to calculate percentage increase is straightforward:
Percentage Increase = [(New Value - Original Value) / Original Value] * 100
Where:
- New Value: The value you are comparing to.
- Original Value: The starting value.
Step-by-Step Calculation
- Find the Difference: Subtract the original value from the new value.
- Divide by the Original: Divide the difference by the original value.
- Multiply by 100: Multiply the result by 100 to express it as a percentage.
Examples of Percentage Increase
Example 1: Sales Growth
A company's sales increased from $50,000 in January to $65,000 in February. What is the percentage increase in sales?
- Difference: $65,000 - $50,000 = $15,000
- Divide: $15,000 / $50,000 = 0.3
- Multiply: 0.3 * 100 = 30%
The sales increased by 30%.
Example 2: Price Increase
The price of a product increased from $20 to $25. What is the percentage increase in price?
- Difference: $25 - $20 = $5
- Divide: $5 / $20 = 0.25
- Multiply: 0.25 * 100 = 25%
The price increased by 25%.
Why Use Percentage Increase?
Percentage increase helps in comparing data across different scales. A $10 increase is significant for a $100 item but trivial for a $10,000 item. Expressing it as a percentage provides a standardized measure of change.
Percentage Increase vs. Percentage Decrease
It's important to note that percentage increase and decrease are calculated differently. Percentage decrease uses the same formula, but when the new value is lower than the original, the result will be negative, indicating a decrease rather than an increase.
To learn more about percentage decrease, see our article on how percentage decrease is calculated.
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