How to Calculate Percentage Increase
Percentage increase measures how much a value has grown relative to its original amount. It is used in finance (stock returns, salary raises), economics (inflation, GDP growth), and everyday calculations (price increases, population growth). The formula is straightforward: find the difference between the new and old values, divide by the old value, and multiply by 100.
- 1Difference: 125 - 100 = 25
- 2Divide by original: 25 / 100 = 0.25
- 3Multiply by 100: 0.25 x 100 = 25%
Percentage Increase Reference Table
| Original | Increase % | New Value | Absolute Change |
|---|---|---|---|
| $100 | 5% | $105 | $5 |
| $100 | 10% | $110 | $10 |
| $100 | 15% | $115 | $15 |
| $100 | 20% | $120 | $20 |
| $100 | 25% | $125 | $25 |
| $100 | 50% | $150 | $50 |
| $100 | 75% | $175 | $75 |
| $100 | 100% | $200 | $100 |
| $100 | 200% | $300 | $200 |
| $100 | 500% | $600 | $500 |
Practical Applications of Percentage Increase
- Salary raises: A 5% raise on $60,000 = $3,000 increase to $63,000
- Investment returns: A stock going from $50 to $65 = 30% increase
- Inflation: If prices rise from $3.50 to $3.85 = 10% inflation
- Population growth: City growing from 100,000 to 115,000 = 15% growth
- Revenue growth: Company revenue from $1M to $1.3M = 30% increase
- Rent increases: Rent going from $1,500 to $1,575 = 5% increase
A 10% increase followed by another 10% increase is NOT a 20% total increase. Starting at 100: 100 x 1.10 = 110, then 110 x 1.10 = 121. The total increase is 21%, not 20%. This compounding effect is why understanding percentage calculations matters for investments and loans.
Percentage Increase vs. Percentage Points
If a company's profit margin goes from 10% to 15%, it increased by 5 percentage points, but the percentage increase is 50% ((15-10)/10 x 100 = 50%). This distinction is critical in finance and economics. Always clarify whether you mean an absolute change in percentage points or a relative percentage increase.