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Mathematics in Business and Economics
Percentage Changes
A percentage change can be calculated by taking the difference between two figures, dividing the result by the first figure and multiplying by 100. Therefore, to find the percentage change in the price when price has risen from £4.50 to £5.00, we take the change in the price (the difference between £4.50 and £5.00, so 50p) and divide it by the first figure (£4.50 in this case). Multiply the result by 100. The answer is 11.1%. Remember to ensure you consider the decimal points carefully - either ignore them totally or ensure that you divide 0.50 by 4.50 and not 50 by 4.50!
Calculating percentage changes is an important skill in economics and business. A quick calculation can enable you to compare like with like and also to be able to comment on the extent of the change in data. This is especially useful in comparing accounting ratios or trends in key economic and business data.
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