Percentage Increase and Decrease: The Formula That Trips Everyone

How to calculate percentage increase and decrease correctly, why a 25% rise and a 25% fall do not cancel out, and the margin vs markup trap.

2026-09-27 · Math

The formula

Percentage change = (new − old) ÷ old × 100. The divisor is always the starting value — not the average, not the new value.

Why 25% up then 25% down loses money

Start at 100. Up 25% → 125. Down 25% of 125 → 93.75. The fall was calculated on the larger base, so it removed more than the rise added. To return to 100 you need a 20% fall.

Increase versus difference

Percentage increase compares a value with its own past. Percentage difference compares two values with their average. Mixing them produces answers that cannot be reproduced.

Where this costs real money

Margin is profit ÷ price; markup is profit ÷ cost. A 50% markup is a 33% margin. Quoting one as the other is the most expensive arithmetic error in small business.

How do I undo a percentage increase?

Divide by (1 + change). A 25% rise is undone by dividing by 1.25.

Is a 100% increase the same as doubling?

Yes. A 200% increase is tripling.

What is a percentage point?

The arithmetic difference between two percentages — 5% to 7% is 2 points but a 40% relative rise.

Run the numbers

Percentage CalculatorX% of Y, what percent X is of Y, and percentage increase or decrease. Percent IncreaseNew value after a percentage increase. Percent DecreaseNew value after a percentage decrease. Percent DifferenceDifference between two values as a percentage.

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