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How to Find Relative Percent Change


Here you will learn about the calculation of percentage change. You might have heard that the prices of housing has risen by 20 %, but what does it actually mean when people say that something has risen or fallen by a certain percentage?

This type of increase or decrease is called a percentage change. The answer to the question asked above is then: The price for housing at two different times are compared, and the change in price is converted to a percentage relative to the original price. This is what you will learn here.

You want to compare old value to new value and find the percentage change. Have a look at the formula written below.

Formula

Percentage change

% change = new value  old value old value

If you get a positive number, something has grown in value.

If you get a negative number, something has declined in value.

Example 1

You bought a Playstation for $320. You decided to sell it two years later. You sold it for $175. What was the percentage change?

The percentage change is: 175 320 320 0.453 = 45.3%

This means that the change in value was 45.3%. You got a negative percentage, meaning that the Playstation declined in value. It has fallen by 45.3% in value.

Example 2

You deposit $5000 to the bank. A year later you find that this has grown to $5200. What is the percentage change?

The percentage change is: 5200 5000 5000 = 0.04 = 4%

The percentage change is 4 %. Since you found a positive number, the money you deposited has grown in value by 4 %.

Example 3

Four years ago a house cost $350000, now the same house costs $420000. How many percent has the house grown in value?

You have to calculate the percentage change. 420000 350000 350000 = 0.20 = 20%

In four years the value of the house has grown by 20 %.

The math master thinking about percentages.

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