If you’ve ever wondered: How do you calculate the percentage change between two values?—you’re not alone. Whether you’re tracking financial growth, monitoring progress in a project, or comparing any two numbers, understanding how to calculate percentage change is a valuable skill. It can help you assess increases or decreases in value over time.
In this blog post, we’ll break down the simple formula for calculating percentage change and guide you through the process step by step, so you can easily apply it to any situation.
What Is Percentage Change?
Percentage change is a way of expressing the difference between two values as a percentage of the original value. It is often used to show how much something has increased or decreased over a certain period or between two points.
For example, if the price of a product goes from $50 to $60, you can calculate the percentage change to see how much the price has increased in relative terms. This calculation is helpful in many fields like finance, economics, or personal budgeting.
The Formula for Calculating Percentage Change
The formula to calculate percentage change is simple:
Percentage Change= New Value−Old Value/Old Value) ×100
Let’s break down the components of the formula:
- New Value: The value after the change has occurred (e.g., the price after an increase or decrease).
- Old Value: The original value before the change.
- Difference (New Value – Old Value): This is the change, whether positive or negative, between the two values.
- Multiply by 100: This converts the result into a percentage, making it easier to understand in relative terms.
Why Is Calculating Percentage Change Useful?
Understanding percentage change is important because it gives you a clearer picture of how much something has grown or shrunk in relation to its starting point. It’s especially useful in:
- Tracking business performance (e.g., revenue growth or decline).
- Comparing investment returns (e.g., stock market gains or losses).
- Budgeting and finance (e.g., tracking changes in expenses).
- Analyzing progress (e.g., improvements in productivity or efficiency).
Calculating percentage change is a valuable skill that helps you make sense of changes in values, whether they are positive or negative. By following the simple formula and steps outlined above, you can easily calculate percentage change in various situations. Whether you’re working with financial data, comparing prices, or simply tracking changes in your daily life, understanding how to calculate percentage change can provide you with important insights and help you make more informed decisions.