How to Calculate Percentage Increase
Percentage increase measures how much a value has grown relative to its original amount. It's one of the most common calculations in finance, business, and everyday life — from understanding salary raises to tracking investment returns or measuring business growth.
The formula:
Percentage Increase = ((New Value - Original Value) / Original Value) × 100
Step-by-Step Example
Let's say your monthly rent increased from $1,200 to $1,350. What's the percentage increase?
- Find the difference: $1,350 - $1,200 = $150
- Divide by the original: $150 / $1,200 = 0.125
- Multiply by 100: 0.125 × 100 = 12.5% increase
Your rent increased by 12.5%.
Common Percentage Increase Examples
| Scenario | From | To | Increase | % Increase |
|---|---|---|---|---|
| Salary raise | $65,000 | $70,000 | $5,000 | 7.69% |
| Stock price | $42.50 | $51.00 | $8.50 | 20.0% |
| Rent increase | $1,200 | $1,350 | $150 | 12.5% |
| Weight gain | 155 lbs | 162 lbs | 7 lbs | 4.52% |
| Gas price | $3.25/gal | $3.89/gal | $0.64 | 19.7% |
| Website traffic | 8,000 visits | 12,500 visits | 4,500 | 56.3% |
Percentage Increase vs. Percentage Points
These are different and commonly confused:
- Percentage increase: "Inflation went from 3% to 4.5%" — that's a 50% increase (the rate grew by half).
- Percentage points: The same change is a 1.5 percentage point increase (the absolute difference between 3% and 4.5%).
When a politician says unemployment "dropped by 2 percent," they usually mean 2 percentage points (e.g., from 6% to 4%), not a 2% relative decrease (which would be from 6% to 5.88%).
How to Calculate a Value After a Percentage Increase
If you know the original value and the percentage increase, calculate the new value:
New Value = Original × (1 + Percentage / 100)
Example: A $50 item with a 20% price increase: $50 × 1.20 = $60
Example: A salary of $75,000 with a 4% raise: $75,000 × 1.04 = $78,000
Compound Percentage Increase
When something increases by the same percentage repeatedly (like annual investment returns), the increases compound:
Final = Original × (1 + Rate/100)periods
| Starting Value | Annual Increase | After 1 Year | After 5 Years | After 10 Years |
|---|---|---|---|---|
| $10,000 | 5% | $10,500 | $12,763 | $16,289 |
| $10,000 | 7% | $10,700 | $14,026 | $19,672 |
| $10,000 | 10% | $11,000 | $16,105 | $25,937 |
Notice how 10% annual growth doesn't just add $1,000/year — it accelerates. After 10 years, you've gained $15,937, not $10,000. That's the power of compounding.
Frequently Asked Questions
Can percentage increase be more than 100%?
Yes. If something doubles, that's a 100% increase. If it triples, that's a 200% increase. A stock going from $10 to $35 is a 250% increase.
What's the percentage increase from 0?
Percentage increase from 0 is mathematically undefined — you'd be dividing by zero. In practice, if something goes from 0 to any positive number, it's typically reported as "new" rather than as a percentage change.
Is a 50% increase followed by a 50% decrease back to the original?
No! If 100 increases by 50%, you get 150. If 150 then decreases by 50%, you get 75 — not 100. The decrease is calculated from the higher number, so it removes more than was added.
How do I calculate year-over-year percentage increase?
Use the same formula with this year's value as "new" and last year's as "original." For example, revenue went from $2.1M to $2.8M: (($2.8M - $2.1M) / $2.1M) × 100 = 33.3% year-over-year increase.