Mastering Percentage Increase and Decrease: A Complete Guide
Published on January 14, 2026 • By iPercentageCalculator Team
In our daily lives, numbers are constantly moving. Whether it is the rising price of groceries, a salary hike, or the fluctuation of the stock market, understanding percentage change is the key to financial literacy. While using a digital tool is fast, understanding the math empowers you to make better decisions.
1. What is Percentage Increase?
Percentage increase represents how much a value has grown relative to its original starting point. It is the most common metric used to describe growth in business, such as year-over-year revenue growth or population statistics.
Example: Calculating a Salary Raise
Imagine you were earning $50,000 last year, and this year your salary increased to $55,000.
- Find the difference: $55,000 - $50,000 = $5,000.
- Divide by original: $5,000 / $50,000 = 0.1.
- Convert to %: 0.1 × 100 = 10%.
Result: You received a 10% raise.
2. What is Percentage Decrease?
A percentage decrease measures the rate of decline. This is vital for shoppers calculating discounts or investors tracking a dip in asset value.
Example: Retail Discounts
You find a jacket originally priced at $120, but it is now on sale for $90.
- Find the difference: $120 - $90 = $30.
- Divide by original: $30 / $120 = 0.25.
- Convert to %: 0.25 × 100 = 25%.
Result: The jacket is 25% off.
3. Common Pitfalls: The 50/50 Rule
Many people make the mistake of assuming percentages work symmetrically. If a stock drops by 50% and then gains 50%, you are not back to where you started.
If a $100 stock drops 50%, it is worth $50. If that $50 stock then gains 50%, it only goes up to $75. You are still down 25%. This is why accurate calculation is critical in investing.
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