Percentage Increase and Decrease Explained with Simple Examples
December 22, 2025
Percentage Increase and Decrease Explained with Simple Examples
Percentage increase and percentage decrease are used to measure how values change over time. You see them in price changes, salary adjustments, business growth, population data, and performance reports.
Many people find percentage change confusing because it involves comparing two values rather than calculating a simple portion. This guide explains percentage increase and decrease clearly, using step by step formulas, real world examples, and practical use cases.
You can calculate any percentage increase or decrease instantly using the tool on the homepage: Free Percentage Calculator.
What Is Percentage Change
Percentage change shows how much a value has increased or decreased compared to its original value. It answers the question of how big the change is relative to where you started.
Percentage change is always calculated using the original value as the base. This is the most important rule to remember.
Percentage Increase Explained
A percentage increase occurs when a new value is higher than the original value. It tells you how much growth occurred relative to the starting amount.
Percentage Increase Formula
Percentage increase = ((New value − Old value) ÷ Old value) × 100
Step by Step Example
Problem: A product price rises from 80 to 100. What is the percentage increase?
Step 1: Find the difference. 100 − 80 = 20
Step 2: Divide by the original value. 20 ÷ 80 = 0.25
Step 3: Multiply by one hundred. 0.25 × 100 = 25
Answer: The price increased by 25 percent.
You can calculate this instantly using the percentage change section on the homepage: Percentage Increase Calculator.
Common Use Cases for Percentage Increase
- Salary increase: Salary increases from 40,000 to 46,000 equals a 15 percent increase.
- Business growth: Revenue grows from 200,000 to 260,000 equals a 30 percent increase.
- Website traffic: Visitors increase from 10,000 to 12,500 equals a 25 percent increase.
- Population growth: Population rises from 50,000 to 55,000 equals a 10 percent increase.
Percentage Decrease Explained
A percentage decrease occurs when a new value is lower than the original value. It measures how much something has reduced compared to its starting amount.
Percentage Decrease Formula
Percentage decrease = ((Old value − New value) ÷ Old value) × 100
Step by Step Example
Problem: A bill drops from 2,400 to 1,920. What is the percentage decrease?
Step 1: Find the difference. 2,400 − 1,920 = 480
Step 2: Divide by the original value. 480 ÷ 2,400 = 0.2
Step 3: Multiply by one hundred. 0.2 × 100 = 20
Answer: The value decreased by 20 percent.
To calculate decreases quickly, use the percentage change tool here: Percentage Decrease Calculator.
Common Use Cases for Percentage Decrease
- Discounts: A price drops from 5,000 to 4,000 equals a 20 percent discount.
- Expenses: Monthly costs reduce from 3,500 to 2,800 equals a 20 percent decrease.
- Weight loss: Weight drops from 90 to 81 equals a 10 percent decrease.
- Stock decline: Share value falls from 200 to 150 equals a 25 percent decrease.
Percentage Increase vs Percentage Decrease
Although the formulas are similar, percentage increase and decrease describe opposite directions of change.
| Type of Change | When It Occurs | Formula Base | Example |
|---|---|---|---|
| Percentage Increase | New value is higher than old value | Old value | 80 to 100 equals 25 percent increase |
| Percentage Decrease | New value is lower than old value | Old value | 100 to 80 equals 20 percent decrease |
Percentage Change vs Percentage Points
Percentage change and percentage points are not the same, and confusing them can lead to incorrect conclusions.
If a rate rises from 20 percent to 30 percent, the increase is 10 percentage points. However, the percentage increase relative to 20 percent is 50 percent.
Understanding this difference is especially important in finance, statistics, and data analysis.
Common Mistakes to Avoid
Most errors in percentage change calculations come from simple misunderstandings.
- Using the new value as the base: Always divide by the original value.
- Forgetting the direction: Check whether the change is an increase or decrease.
- Skipping multiplication by one hundred: This converts the decimal into a percentage.
- Mixing up absolute change and percentage change: A difference of 20 does not always mean 20 percent.
Practical Examples You Can Practice
Use these examples to test your understanding, then verify the results using the calculator on the homepage.
- Sales increase from 120,000 to 150,000. What is the percentage increase?
- Rent decreases from 1,500 to 1,275. What is the percentage decrease?
- Website traffic drops from 8,000 to 6,400. What is the percentage decrease?
- Production rises from 500 units to 650 units. What is the percentage increase?
Check all results using: Free Percentage Calculator.
Frequently Asked Questions
Can percentage increase be more than one hundred
Yes. If the new value is more than double the original value, the percentage increase will exceed one hundred percent.
Is percentage decrease limited to one hundred
Yes. A value cannot decrease by more than one hundred percent because that would mean dropping below zero.
What is the easiest way to calculate percentage change
The easiest way is to use an online tool that applies the correct formula automatically. You can calculate both increase and decrease instantly here: Percentage Change Calculator.
Why do we divide by the old value
The old value represents the starting point. Percentage change measures how much the value has changed relative to where it started.
Conclusion
Percentage increase and decrease help you understand how values change over time in a clear and standardized way. By always using the original value as the base and applying the correct formula, you can avoid common mistakes and interpret data accurately.
For fast and accurate results without manual calculations, you can calculate any percentage increase or decrease using the tool on the homepage: Free Percentage Calculator.