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Compare percentage change with percentage-point change

A headline says a rate rose from one figure to another, and two different answers both sound reasonable.

On this page
  1. Why are there two kinds of change?
  2. How do I find each one?
  3. Worked example
  4. The mistake to watch for
  5. Check yourself
  6. Where this leads next

A percentage-point change is the simple difference between two percentages. A percentage change compares that difference with the original percentage. They answer different questions, so they usually give different numbers.

This lesson sits between reversing a percentage and successive changes in percentages and changing bases, and it matters whenever a question quotes rates, shares or interest.

Why are there two kinds of change?

A percentage is already a ratio. When a rate itself changes, you can ask “by how many points?” or “by what percentage of where it started?”.

Imagine 20% of students in a school cycle to class. A year later it is 25%.

The rate moved 5 points along the scale. But compared with where it began, the rate grew by a quarter. Both statements are true, and they are not the same statement.

How do I find each one?

  1. Percentage-point change = new rate − old rate.
  2. Percentage change = (new rate − old rate) ÷ old rate × 100.

The word “points” (or the wording “by how many percentage points”) tells you step 1. The words “percentage increase” or “percent rise” tell you step 2.

Worked example

A savings account paid 4% interest per year last year. This year it pays 6%.

Step 1, percentage-point change: 6 − 4 = 2 percentage points.

Step 2, compare with the old rate: 2 ÷ 4 = 0.5.

Step 3, convert: 0.5 × 100 = 50.

So the rate rose by 2 percentage points, which is a 50% increase in the rate.

Check: a 50% increase in 4% means 4 × 1.5 = 6. ✓ The base here is the old rate of 4%, so that is what the percentage change is measured against.

The mistake to watch for

The usual slip is to report the point difference as if it were a percentage change.

Mistaken statement: “The rate rose from 20% to 25%, so it increased by 5%.”

The student gave the difference of 5 but labelled it as a percentage change.

The correction is to choose the right label.

The rate rose by 5 percentage points. As a percentage change it rose by 5 ÷ 20 = 0.25, which is 25%. Writing “5%” is wrong because 20% × 1.05 is 21%, not 25%.

A good habit is to ask, “Is the thing I am describing a rate, or a change in a rate?” If it is the second, name which kind of change you mean.

Check yourself

Try these without a calculator, then open each answer.

1. A rate falls from 8% to 6%. Give the change in percentage points and the percentage decrease.

Show answer

Points: 8 − 6 = 2 percentage points down. Percentage decrease: 2 ÷ 8 = 0.25, so 25% decrease.

Check: 8 × 0.75 = 6. ✓

2. Attendance rose from 80% to 84%. Give both changes.

Show answer

Points: 84 − 80 = 4 percentage points. Percentage increase: 4 ÷ 80 = 0.05, so 5% increase.

Check: 80 × 1.05 = 84. ✓

3. A report says unemployment rose from 3% to 4.5%. What is the change in percentage points, and what is the percentage increase?

Show answer

Points: 4.5 − 3 = 1.5 percentage points. Percentage increase: 1.5 ÷ 3 = 0.5, so 50% increase.

Check: 3 × 1.5 = 4.5. ✓

Where this leads next

Once the two kinds of change are separate in your mind, continue to successive increases and decreases. The percentage-base explorer lets you see which amount each percentage is taken from, and the percentages practice set mixes all the types together.

Students who lose marks here often know the method but read the question too quickly. A teacher in online one-to-one Mathematics tuition can slow that reading down with you and build a reliable checking habit.

Questions people ask

What is a percentage point?

A percentage point is the plain difference between two percentages. If a rate goes from 20% to 25%, it has risen by 5 percentage points. The unit is points on the percentage scale, not a percentage of anything. It answers how far apart the two rates are.

How do I find the percentage change between two rates?

Work out the difference, then divide by the original rate and multiply by 100. From 20% to 25%, the difference is 5, and 5 ÷ 20 = 0.25, so the rate rose by 25 percent. The original rate is the base, exactly as with any other percentage change.

Which one should I give if the question just says how much has it increased?

Read the wording and the units. If it asks for the change in the percentage itself, give percentage points. If it asks for the percentage increase, compare the change with the original rate. When the question is unclear, state which one you calculated and show the working.

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Your next step

If you can calculate a percentage change but hesitate when a question quotes rates, a one-to-one teacher can work through your wording with you until the base is clear each time.

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