It may be necessary for you to calculate the increase in the price of things you use in your day-to-day life.To calculate the percent increase of an item, you just need to know the past and present costs and perform a few simple calculations.
Step 1: The item's previous price should be remembered.
You can find cost data with your own memory.Maybe there is an item you've been buying for years at the same price in the grocery store.This could be a staple of your weekly grocery shopping trips.For a number of years, the price of a gallon of milk has been $2.50.This is the price that you want to use for your cost increase calculation.
Step 2: The item's current price should be checked.
If the price of an item has gone up in the past, you can now calculate a cost increase percentage for the item.You need the item's current cost first.You can check the store for the current price of the item.A gallon of milk has always been priced at $2.50, but now it is $3.50.You can calculate the cost increase percentage to know how much you will be charged at the new price.Make sure both values refer to the same product.Your costs are not directly comparable if one is better.
Step 3: Determine historical cost information.
It is not easy to locate previous cost information in some cases.You'll need to find cost information elsewhere when comparing costs from long ago to now or finding cost increases on an item you've never purchased.The same is true for cost measures, such as the consumer price index, a measure of average consumer prices in the US, or the purchasing power of the U.S. Dollar.You will need to do online research to find previous cost figures.To find cost information for that time, try typing in the item and year you are interested in, along with "cost" or "value."Cost information for various consumer goods from 1900 until the present can be found at http://mclib.info/reference/local-history-genealogy/historic-prices/.
Step 4: Take a look at modern cost figures.
You will need a modern figure to compare it with historical cost information.Try to find the closest modern version of the item you are comparing.Don't compare items that are different due to different levels of quality or additional features.In your calculations, use the most current information from the current year.
Step 5: Understand the formula.
The percentage increase formula is used to calculate the percent increase in a cost.The formula is written out in full.The difference between a decimal and a percentage is converted at the end.
Step 6: Take the previous cost and add it to the new cost.
Put your variables in the formula.If you want to simplify the equation, subtract the previous cost from the new cost.For example, if you bought a gallon of milk for $2.50 a month ago and it is $3.50 today, subtract $2.50 from $3.50 to get the dollar amount of the change, or $1.00 in this case.
Step 7: Take the previous cost and divide it by the difference.
Divide the result of the last step by the price before it.The new and old costs are converted to a percentage of the previous cost.The previous cost would be divided by the result of the previous step to arrive at $1.00.The result is 0.40, which is a number rather than a dollar amount.
Step 8: The answer should be converted to a percentage.
To get the percentage increase, multiply the answer by 100.The percentage that the previous cost has increased by will be used to arrive at the new cost.40 percent is the displaystyle 0.40Times 100.The price of a gallon of milk has gone up by 40 percent.
Step 9: Determine the increase in your expenses.
The results of your cost increase calculation can be used to calculate increases in cost.You can see if some items are increasing faster or slower than other costs.To find out if your pay raises are keeping pace with your cost of living, compare the increases to the decreases in your income.
Step 10: Track business expenses.
Cost increase percentages can be used to determine the effects on projected or actual profit margins.This information can be used to justify a selling price increase.If a business sees that the price of one of its inputs to production is rising regularly, it may choose to seek an alternative input or supplier.The business could raise prices.
Step 11: Understand appreciation on collectibles.
Vintage cars, watches, and art might appreciate in value over time.The cost increase percentage calculation can be used to measure this appreciation.To assess the increase, compare previous prices with current market prices.If a watch sold for $100 in 1965, but is now resold on the used market for $2,000, this equates to a 1900 percent price increase.
Step 12: For other types of percent increase, use the same process.
A number of other calculations can be done using the formula and process used to find the percent cost increase.To find the percent difference between two amounts of time, or any number of other comparisons between numbers, you can use the same formula with different terms.