Thursday, September 02, 2010

Maths

How do you calculate a percentage change from one number to another?

Answer
Percentage change between two numbers A & B can be calculated as:
(B-A)/A * 100
For example, if a stock price increases in value from $123 to $145 the percentage increase is:
(145-123)/123 * 100 = 22/123 * 100 = 0.179*100 = 17.9%
Alternatively, if a stock price decreases in value from $145 to $123 the percentage decrease is:
(123-145)/145 * 100 = -22/145 * 100 = -0.152*100 = -15.2%
Percentage change has the formula of the change divided by the original amount multiplied by 100.

But many people get confused with these questions so use common sense to sanity check the answer that you come up with!

So if you are told you start with 10 apples and eat 2, then are asked what the percentage change is, then you know the calculation you need to do.

Many people do this calculation:

It is 10 - 2 which is 8, divided by the original, which is 10, * 100 = (.8) * 100 or 80%

But that is not working out the percentage change, it is working out what percentage 8 apples is of 10 apples.

The percentage change is simply 2 / 10 * 100, or 20%.

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