Unlocking Growth Insights- A Step-by-Step Guide to Calculating Percentage Growth Between Two Numbers
How to Calculate Percentage Growth Between Two Numbers
Calculating percentage growth between two numbers is a fundamental skill in various fields, such as finance, economics, and statistics. It helps us understand the rate at which a value has increased or decreased over a specific period. In this article, we will discuss the step-by-step process of calculating percentage growth between two numbers, along with some practical examples.
Understanding the Formula
The formula to calculate percentage growth between two numbers is as follows:
Percentage Growth = [(New Value – Old Value) / Old Value] 100
Here, the “New Value” refers to the value after the change, and the “Old Value” is the value before the change. The formula calculates the difference between the two values, divides it by the old value, and then multiplies the result by 100 to get the percentage.
Step-by-Step Process
1. Identify the Old Value and New Value: The first step is to determine the old value and the new value. The old value is the starting point, and the new value is the ending point.
2. Calculate the Difference: Subtract the old value from the new value to find the difference. This will give you the amount of change that has occurred.
3. Divide by the Old Value: Divide the difference by the old value. This step will determine the rate of change relative to the starting point.
4. Multiply by 100: Multiply the result from step 3 by 100 to convert the rate of change into a percentage.
5. Round the Result: Depending on the level of precision required, round the percentage growth to the desired number of decimal places.
Example 1: Stock Price Growth
Let’s say a stock’s price was $50 at the beginning of the year and increased to $70 by the end of the year. To calculate the percentage growth, follow these steps:
1. Old Value: $50
2. New Value: $70
3. Difference: $70 – $50 = $20
4. Divide by Old Value: $20 / $50 = 0.4
5. Multiply by 100: 0.4 100 = 40%
The stock price has grown by 40% over the year.
Example 2: Population Growth
Suppose a city had a population of 100,000 in 2010 and grew to 120,000 in 2020. To calculate the percentage growth, follow these steps:
1. Old Value: 100,000
2. New Value: 120,000
3. Difference: 120,000 – 100,000 = 20,000
4. Divide by Old Value: 20,000 / 100,000 = 0.2
5. Multiply by 100: 0.2 100 = 20%
The city’s population has grown by 20% over the decade.
Conclusion
Calculating percentage growth between two numbers is a straightforward process that can be applied to various scenarios. By following the steps outlined in this article, you can easily determine the rate of change and gain valuable insights into the growth or decline of a particular value. Whether you are analyzing financial data, population trends, or any other metric, understanding percentage growth is essential for making informed decisions.