What is Percentage Change
Percentage change is the percentage of change in value when a number of a value has changed either increase or decrease. For example, the percentage change in the stock index compared to yesterday’s value.
Normally, there are two situations for the calculation of percent change, include:
- The percentage increase
- The percentage decrease
The percentage change is an important number for the business or economics student and the investors to understand. This is because the percentage of change is a number that appears in many equations such as the elasticity of demand, comparison of profit or loss, and the change in the stock index or a single stock price.
Percentage Change Formula
To calculate the percentage change, there are two situations for the calculation of percent change, include:
- The percentage increase (Growth)
- The percentage decrease (Decline)
How to Calculate Percentage Change Increase (Growth)
Percentage increase refers to the percentage changes in the value when it is increased. For example, salary increase.
Percentage change of increase can be calculated by the following formula:
Percent change increase = [(Increased Value – Original Value) ÷ Original Value] x 100
For example, the current salary is $10,000 a month if the salary is increased to $12,000, it is increased by = [(12,000 – 10,000) ÷ 10,000] x 100 = 20%.
This means the percentage change in salary increased by 20%.
How to Calculate Percentage Change Decrease (Decline)
Percentage decrease refers to the percentage changes when the value is decreased. For example, salary decrease and the stock index decline.
The percentage increase can be calculated by the following formula:
Percent change decrease = [(Original Value – Decreased Value) ÷ Original Value] x 100
For example, the current salary is $20,000 a month if the salary is decreased to $15,000, it is decreased by = [(20,000 – 15,000) ÷ 20,000] x 100 = 25%.
This means the percentage change in salary is decreased by 25%.
Related article: How to Calculate Percent in Every Method