Calculating a percentage change

Understanding Percentage Change

Percentage change is a mathematical concept which measures the degree of change, increase or decrease, in a value over time.
This numerical value is given as a percentage (%) and can indicate either a growth or reduction in quantities.

Calculating Percentage Change

To calculate the percentage change, the formula used is: (Final Value – Initial Value) / Initial Value x 100%
This will give the percentage change from the initial to the final value.

Positive and Negative Percentage Change

If the outcome of your percentage change calculation is positive, it signifies an increase in the value.
If the outcome of your calculation is negative, it represents a decrease in the value.

Percentage Change in Real-World Scenarios

Percentage change is frequently employed in real-world contexts, such as calculating interest rates, inflation rates, business growth, changes in population, among others.
For instance, if a product price increases from £10 to £15, the percentage change would be calculated as ((15-10)/10) x 100% = 50%. This indicates a 50% increase in price.

Avoiding Common Mistakes with Percentage Change

When performing calculations it’s important to always utilise the original amount as your baseline rather than the new total. This is a common mistake.
Do not confuse percentage change with percentage point change - they are not the same. Percentage point change refers to the difference between two percentage rates, while percentage change expresses the relative change between two values. For example, if a rate rises from 10% to 15%, the percentage point change is 5, while the percentage change is 50%.

Practice Problems with Percentage Change

Practicing percentage change calculations using a variety of problem types will heighten your understanding and solidify your competency in this area.
Dedicated practice can also help you recognise how percentage changes are related to other mathematical concepts, such as ratios and fractions.