Percentage Increase Calculator
Updated: Oct 1, 2022
What Is a Percentage Increase?
The percentage increase is a mathematical base metric that accurately measures the rise between two values. It is widely used across all numerical systems, including prices, temperatures, real numbers, and many more. And in most cases applies to values that change over time. Learn how percentage increases work, its formula, and examples of it in use.
Alternate Names: Relative Change
Try our percentage growth calculator below:
Percentage Increase Definition and Examples
A percent increase measures the difference between the final value and initial value, as a factor of the initial value. When this decimal is multiplied by the number 100, the result is a percentage increase between the final and initial values. Statisticians may use percentage increase to measure the probability of events, investors may use it to measure their returns, and accountants may use it to calculate tax - the diversity in the application of percentage increase is far and wide.
Here's a quick example on how to calculate percent increase:
An investor makes a 70% increase in his investment when the share price rose from $1,000 to $1,700.
A statistician notices that the population has increased by 30%, rising to 130,000 from a previous 100,000.
A grocery shop increases the price of bread by 2% to match inflation.
There are many examples of percentage increases in everyday life, and therefore it's quite important to understand how to calculate it.
Cheat Sheet
A percentage increase is a positive mathematical measure of the difference between two values.
It is used by a wide variety of industries, like finance, actuarial science, retail, and many more.
A positive percentage increase will always be between 0 and 100, whilst a negative is between 0 and -100.
Percentages are based metrics, meaning they allow you to compare values with different units; For example, comparing the growth of stock price versus the growth in population.
Formula
The formula for calculating a percent increase is as follows:
PI (%) = ((FV - IV) ÷ IV) × 100, where:
PI (%) = Percent Increase
Fv = Final Value
Iv = Initial Value
The percentage increase will always be positive if the final value is larger than the initial value. However, if the final value is smaller than the initial value, the result would be a percentage decrease instead. To help solidify this formula, here are a couple of examples of percentage increases:
Example Question:
James is an investor and wants to work out the gain on his portfolio, as a percentage, in the past year. On the first day of the year, his portfolio was worth $150,000, and on the last day, it was worth $270,000. How would James calculate the percentage increase? Solution: The best way to solve any problem is to first start by defining the information known and then substituting them into the formula provided. Based on the question, we know: Initial Value = $150,000 Final Value = $270,000 We can then follow the 3 steps above to find the portfolio gain as a percentage:
Increase = 270,000 - 150,000 = 120,000
Factor Increase = 120,000 ÷ 150,000 = 0.8
Percent Increase = 0.8 × 100 = 80% increase
Alternatively, you can substitute the values directly into the percentage increase formula, which would look like this: Pecentage increase = ((270,000 - 150,000) ÷ 150,000) × 100 = 80% increase So, James' portfolio increased by 80% in the past year.
How to Calculate Percentage Increase
Takeaway the first value from the new value, and then divide this by the first value. Then multiply the answer by 100 - this will give you the percentage increase.
1. Find the Difference
The first step is to find the difference between the two numbers:
Difference = Number 2 - Number 1
2. Find the Factor
Next, you want to divide the 'difference' from above by Number 1:
Factor = Difference ÷ Number 1
3. Multiply by 100
Finally, you want to multiply the factor by 100:
Percentage Increase = Factor x 100
These 3 steps will work for any percentage increase calculation, on any type of number; whether it's a currency, share price or interest rate - it's universal.
How to Calculate Percent Increase in Excel
Excel Formula
The excel formula for percentage increase is as follows:
PI (%) = (C3-B3)/B3 where:
PI (%) = Percentage Increase C3 = An Excel Cell With The Final Value B3 = An Excel Cell With The Initial Value Remember to format the cell as a percentage (%) - see the below instructions to see how.
Working in industry, calculating your budgets, or doing your math homework - calculating percentage increases in excel is a must-have skill. Learn the excel formula for percentage increase, and how to apply it. The first step is to have two values that you want to compare the percentage increase between, like this:
In this example, the initial value is £567.43 in cell B3 and the final value is £1,253.69 in cell C3. To find the percentage increase between the final value and initial value, you need to use an excel formula.
To calculate the percentage increase, you subtract the initial value, from the final value, and then divide by the initial value. In our excel example that would look like this:
Percentage Increase = (C3-B3)/B3
This formula will then output the factor increase in the cell, which needs to be formatted as a percentage using the excel built-in button on the title bar ribbon. To find this button, navigate to the 'Home' tab, then click the '%' symbol in the 'Number' section:
Once selected, cell D3 will show the percentage increase between the initial value and final value, equalling 121.94% (2 decimal places):
To change the number of decimal places shown on the percentage increase number, use the symbols highlighted in the red box below:
Difference Between Percentage Increase and Decrease
A percentage increase is a positive value between 0 to 100, whereas a percentage decrease is a negative value between 0 and -100. In order for a percentage increase to exist, the final value must be greater than the initial value. Whereas for a percentage decrease the final value must be less than the initial value:
Percentage Increase | Percentage Decrease |
---|---|
Always greater than zero, less than or equal to 100% | Always less than zero, great than or equal to -100% |
Number 2 > Number 1 | Number 2 < Number 1 |
Always positive | Always negative |
Why is it useful?
Investors, traders and nearly every person in finance can use percentage increases (or decreases) to fairly measure their performance across different asset classes, or even to change the prices of their services. The percentage increase will always be the go-to measuring device to determine the growth or positive change between two values, which is widely accepted.
FAQs
How do you calculate a 20% increase?
Multiply your number by 1.2 to find a 20% increase.
How do you calculate a 5% increase?
How do you calculate a 2% raise?
Article Sources
"Percentage Change and Percentage Point Change: A Primer" by the Quantitative Skills Centre
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