Percentage increase and decrease are fundamental concepts used to describe how much a quantity has grown or shrunk relative to its original size. Whether you're tracking your investment portfolio, analyzing sales data, or simply trying to figure out if that sale price is actually a good deal, understanding these calculations is essential.
The Formula
The core formula for calculating percentage change is straightforward:
Percentage Increase
When the new value is greater than the old value, the result is positive, indicating a percentage increase. For example, if a stock price goes from $50 to $60:
- New Value = 60
- Old Value = 50
- Change = 60 - 50 = 10
- Percentage Increase = (10 / 50) × 100% = 20%
Percentage Decrease
Conversely, if the new value is less than the old value, the result is negative, indicating a percentage decrease. If that same stock drops from $60 back to $50:
- New Value = 50
- Old Value = 60
- Change = 50 - 60 = -10
- Percentage Decrease = (-10 / 60) × 100% ≈ -16.67%
Important Note: Notice that an increase from 50 to 60 is a 20% increase, but a decrease from 60 to 50 is a 16.67% decrease. The percentage change always depends on the starting value.