How to Calculate Percentage Increase

Walk through $4 to $5

1. Write the original value. The coffee was $4.
2. Write the new value. The coffee is $5.
3. Subtract the original from the new value. 5 − 4 = 1. The price rose by one dollar.
4. Divide that change by the original. 1 ÷ 4 = 0.25. The rise is one quarter of the old price.
5. Multiply by 100 to convert the decimal to a percent. 0.25 × 100 = 25. The increase is 25%.

If step 3 comes out negative, you still finish the steps. From $5 to $4, the change is −1, −1 ÷ 5 is −0.20, and the result is −20%. Say “20% decrease” in a sentence if you prefer words to a signed number. Both refer to the same result.

Check $4 to $5 in the calculator.

Mistakes that change the answer

• Dividing by the new value. 1 ÷ 5 is 20%, and that is not the increase from 4 to 5.
• Forgetting to multiply by 100, and reporting 0.25% instead of 25%.
• Forgetting to divide a whole-number percent by 100 when you apply it. Adding 5% means multiplying by 1.05, not by 1.5 and not by 5.
• Calling a gap in rates a percentage increase. Interest moving from 5% to 7% rose by 2 percentage points. Relative to the old 5% rate, the increase is 40%.
• Using the percentage difference formula when you do have a before and after. Difference would compare 4 and 5 against their average, 4.5, and report about 22.2222%.
• Forcing a result when the original is 0. Stop and call the percent undefined.

Pick the matching shortcut

Once the steps feel solid, you can skip ahead. Known old and new values use the five steps. A known percent uses multiplication by 1 plus that percent. A known final value and a known percent use division by that same factor. Spreadsheet versions of all three are on the Excel and Google Sheets page.