5 Common Mistakes When Calculating Percentage Increase

Mistake #1: Dividing by the NEW Value

This is the most frequent error.

Wrong:
```
(New - Old) / New
```
Right:
```
(New - Old) / Old
```

Why it matters: If a price goes from $100 to $150:

Correct (Divide by Old): 50 / 100 = 50% increase.
Wrong (Divide by New): 50 / 150 = 33%.

33% is actually the margin, not the mark-up. Always divide by the starting number to find growth.

Mistake #2: Adding Sequential Percentages

"My portfolio went up 10%, then another 10%. So I'm up 20%, right?" Wrong.

Percentages compound (multiply), they don't add.

Start: $100
+10%: $110
+10% on $110: $121

Total Increase: $21, which is 21%, not 20%. The larger the numbers, the bigger this gap becomes. Always calculate the total change from Start to Finish using the Investment Return Calculator.

Mistake #3: Confusing "Percent" vs "Percentage Points"

We wrote a full guide on this, but it bears repeating. If a tax rate goes from 5% to 6%:

It increased by 1 percentage point.
It increased by 20% mathematically ((6-5)/5).

Reporting this wrong can be misleading. Be precise with your terms.

Mistake #4: The Asymmetry of Loss

If you lose 50%, you need a 50% gain to get back to even, right? Wrong.

Start: $100
Lose 50% = $50
Gain 50% on $50 = $75. (You are still down $25!)

To recover from a 50% loss ($50 back to $100), you need a 100% gain. This is why losses hurt portfolios so much more than gains help them.

Mistake #5: Calculating Increase from Zero

"My sales went from $0 to $1000. What is the percentage growth?" Undefined.

You cannot divide by zero. Mathematically, the growth is infinite, but in practical terms (like for a Sales Growth Calculator), it's usually marked as "New" or treated as an absolute gain rather than a percentage.