Colorful House of Math logo
Log in

How to Use Growth Factors in Calculations


You use growth factor in the formula below, and solve the calculation or equation that appears. When using the formula, you always insert x for the value you want to find.

Formula

Calculation of new value, old value and growth factor

New value = old value growth factor

Example 1

The price of a car decreases by 5 %. What will the price be after the decrease if the price of the car is $20000?

Here the old price is $20000, new value = x, and the growth factor is as follows:

(1 5 100) = 1 0.05 = 0.95

The new price will be new value = old value growth factor x = $20000 0.95 = $19000

Example 2

iPhone 13 costs $799 and is increased by 15 % from iPhone 12. What did the iPhone 12 cost?

Here is old price = x, new value $799, and the growth factor becomes

(1 + 15 100) = 1 + 0.15 = 1.15

The old price was thus: new value = old value growth factor 799 = x 1.15 799 1.15 = x 1.15 1.15 x 694.78

So, an iPhone 12 costs $694.78.

Example 3

An item originally costed $599. The price was reduced to $349, and the store says that the item is lowered by 45 %. Is it true?

To find p, you must first find the growth factor. You do this by using the formula above.

Let’s call the growth factor gf to save some space. new value = old value gf 349 = 599 gf| : 599 gf = 349 599 0.583

new value = old value growth factor 349 = 599 growth factor| : 599 growth factor = 349 599 0.583

Since the value of the growth factor is less than 1, you get confirmed that it is a drop in price. Then you use the formula for growth factor, with minus, to find p in percentage: 0.583 = 1˘ p 100 p 100 = 1˘0.583 p 100 = 0.417| 100 p = 41.7

The price has only been reduced by 41.7 %. You could have been tricked!

Want to know more?Sign UpIt's free!
White arrow pointing to the LeftPrevious entry
How to Calculate Growth Factor
Next entryWhite arrow pointing to the right
How Do Percentage Points Work?