How to Calculate Percentage Increase

What is the importance of calculating percentage increase? Read on to learn how to calculate percentage change in case of two numbers.

The Basics: What is a Percentage?

What is the importance of calculating a percentage? When you are given a number, you can't really make much out of it. Suppose you are told that there are 400,000 people who graduate in various arts each year in the world. Now what can you make of this number? Is it good or bad? Is it a lot or is it not that big a number at all?

Hence, there is a need to check it with another number, which will help give the former number a point of comparison. Now suppose I say that out of 10 million people who graduate each year, 400,000 graduate in various arts.

Comparing it with another number gives you a better indication of things. 400,000 may seem a mighty large number at the outset, but comparing it to another related number may help change your mind.

Let's take another example. Suppose you had a test and you got 15 marks. How would you know whether the marks are good or bad? Simple. By checking the marks obtained with the total marks. Now if the test is out of 20, the marks obtained are pretty good. If the test was out of 100, the opinion changes altogether!

A percentage similarly helps you compare two unrelated amounts. What is a percentage? A percentage is the value of a number written in terms of 100. Carrying the previous example forward, suppose you got 15 out of 20. If the test was out of 100, how much would you have got? You cross multiply the numbers to get the answer. 75.

Now does it really make a difference whether you got 15 on 20 or 75 on 100? Yes-for two reasons. The first reason being not many people understand or quickly see 15 out of 20 as a figure for analysis. The world is used to comparing two different figures in percentages. This standardization makes the world understand numbers better.

Let me take an example to help you understand the second reason. Suppose you got 15 on 20 in the first test and then 20 on 25 in the second test. Has your performance improved? How would you know? You would know by making both the bases equal. 100. By taking the same base, you can see that 15 on 20 comes to 75% while 20 on 25 comes to 80%. Hence you can compare these two numbers now and say for sure that there has been an improvement in your performance!

Calculating Percentage Increase

Now let's say you got 303 marks out of 350 in your first test and 343 out of 350 in the second test, what is the percentage increase in the marks? Now let me mention here that the percentage increase does not refer to the difference in percentage between the two sets of marks. It refers to what percentage of the original amount has increased.

A simple formula is all you need to calculate this. The percentage increase is calculated by the formula:

^{(increased amount - original amount)}/_{original amount} X 100

So now taking the given example forward, we can calculate the percentage increase in marks as

= ^{(343 - 303)}/₃₀₃ X 100

=⁴⁰/₃₀₃ X 100

= 13.20 %.

Thus the percentage increase in the marks secured is 13.20%.

Calculating percentage change is a very important problem solving technique in mathematics hence, it is important that you learn how to do it!