Buzz
Understanding how to calculate percentage increase can be very helpful in various situations. Even when watching the news, you'll often hear about significant changes in numbers without knowing the percentage increase, which would help you better understand the figures. If you calculate the percentage increase and discover that it’s only 2%, you’ll realize you shouldn’t trust exaggerated stories.
Steps
Calculate Percentage Increase
Write down the initial and final values. For example, let’s say your car insurance premium has increased. You should record the following values:
- Your car insurance cost was 400,000 VND before the increase. This is the initial value.
- After the increase, it costs 450,000 VND. This is the final value.
Determine the increase amount. Subtract the initial value from the final value to find the amount of increase. At this point, we are still working with regular numbers, not percentages.
- In the example above, 450,000 VND – 400,000 VND = an increase of 50,000 VND.
Divide the answer by the initial value. A percentage is simply a special form of fraction. For example, "5% of doctors" is shorthand for "5 out of 100 doctors." By dividing the result by the initial value, we turn it into a fraction that compares the two values.
- In the example above, 50,000 VND / 400,000 VND = 0.125.
Multiply the result by 100. This step will help convert your final answer into a percentage.
- The final result for our example is 0.125 x 100 = an insurance cost increase of 12.5%.
Alternative Method
Write down the initial and final values. Let’s begin with a new example. The world population grew from 5,300,000,000 in 1990 to 7,400,000,000 in 2015.
- To handle the large numbers, we can use a shortcut. Instead of counting all the zeros in each step, we can rewrite them as 5.3 billion and 7.4 billion.
Divide the final value by the initial value. This method will tell us the degree of difference between the final result and the initial number.
- 7.4 billion ÷ 5.3 billion = about 1.4.
- We will round the result to two significant digits, as specified in the original problem.
Multiply by 100. This step will give you the percentage difference between the two values. If the value is increasing (instead of decreasing), your result will always be greater than 100.
- 1.4 x 100 = 140%. This means that the world population in 2015 increased by 140% compared to the population in 1990.
Subtract 100. In this problem, "100%" represents the size of the initial value. By subtracting it from our result, we’re left with the percentage increase in value.
- 140% - 100% = population increased by 40%.
- This is because initial value + increase = final value. Rearranging the equation, we get increase = final value – initial value.
Advice
- The percentage increase tells you about the relative change, meaning how much the value has grown in comparison to the initial value. A 100,000 VND increase in the price of eggs is quite significant. But a 100,000 VND increase in the price of a house is a relatively small change.
- You can calculate the percentage decrease using the same method. You’ll get a negative result indicating the value is getting smaller.
- The increase in value is also known as the absolute change, meaning the actual amount described. Both the egg price and the house price increased by 100,000 VND, which represents the same absolute change.
