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.