How to Calculate Percentage Change on the GMAT?

Short Answer

Percentage change shows how a value changes from its start. Use: (new − old) / old * 100. Example: price goes from 40 to 50, change = (50 − 40) / 40 * 100 = 25% increase. From 50 to 40, change is 20% decrease.

Overview

Percentage change is a friendly idea once you fix the base and follow a steady sequence. You will meet it in word problems, tables, and charts. The same method handles increases and decreases with equal ease. Build this habit in your GMAT preparation, and let it support clear decision making later in MBA admissions as well. When you move step by step, the numbers feel calm, and your work becomes reliable.

Why Percentage Change Matters

Percentage change lets you compare movements across different scales. A rise of 10 units means something different on a base of 20 than on a base of 200. By measuring change relative to the starting point, you understand impact, not just difference. This is why the base matters.

The Core Method

Use this four-step structure every time:

1. Identify the old value and the new value.
2. Compute the difference: new minus old.
3. Divide that difference by the old value.
4. Multiply by 100 to convert to percent.

A positive result means an increase. A negative result means a decrease.

Example 1: Simple Increase

A quantity rises from 40 to 50.

Difference = 50 − 40 = 10.

10 ÷ 40 = 0.25.

0.25 × 100 = 25% increase.

Example 2: Simple Decrease

A quantity falls from 50 to 40.

Difference = 40 − 50 = −10.

−10 ÷ 50 = −0.20.

−0.20 × 100 = 20% decrease.

Successive Changes: Multiply Factors, Do Not Add Percents

Two or more changes in a row require multiplication, not addition. Convert each percent change to a factor, multiply, then compare with the start.

• A 20% increase then a 10% decrease: start 100 → 100 × 1.20 = 120 → 120 × 0.90 = 108. Net factor = 1.20 × 0.90 = 1.08, so net change = +8%.
• A 30% decrease then a 40% increase: start 100 → 100 × 0.70 = 70 → 70 × 1.40 = 98. Net factor = 0.70 × 1.40 = 0.98, so net change = −2%.

Adding −30% and +40% gives +10%, which is incorrect because the bases changed between steps.

Working Backward: Find the Original from the Final

Divide by the change factor.

• After a 20% increase, the final is 72. Factor = 1.20, original = 72 ÷ 1.20 = 60.
• After a 20% discount, the final is 160. Factor = 0.80, original = 160 ÷ 0.80 = 200.

Do not subtract the percent from the final. Always divide by the factor.

Percentage Points vs Percentage Change

If a rate moves from 12% to 15%, the increase is 3 percentage points. As a percentage change, the increase is 3 ÷ 12 × 100 = 25%. Percentage points compare two rates directly. Percentage change measures movement relative to the starting rate.

“Percent of What?” Fix the Base Every Time

Most errors come from using the wrong base. The percent always applies to the original value for that step.

• A shirt is 25% off, then 10% tax applies to the discounted price.
  Start 100. Discounted price = 100 × 0.75 = 75.
  Taxed price = 75 × 1.10 = 82.5.
  The 10% is on 75, not on 100.

Typical GMAT Framing and How to Respond

• “By what percent did X increase from A to B?”
  Compute (B − A) ÷ A × 100.
• “X is Y percent more than A. What is X?”
  Compute A × (1 + Y/100).
• “After a Y percent decrease, the value is V. What was the original?”
  Compute V ÷ (1 − Y/100).
• “Average change over two periods?”
  Multiply the factors for each period, compare with the start, then convert to a single net percent. Do not average the percents arithmetically unless the bases are equal and unchanged.

Illustrative Mini Set

1. A population grows from 8,000 to 9,600.
   Change = 1,600. Base = 8,000. Percent = 1,600 ÷ 8,000 × 100 = 20% increase.
2. A price drops from 250 to 175.
   Change = −75. Base = 250. Percent = −75 ÷ 250 × 100 = 30% decrease.
3. A value is increased by 25% and then decreased by 20%.
   Net factor = 1.25 × 0.80 = 1.00. Net change = 0%.
4. After a 15% increase, the final amount is 230.
   Original = 230 ÷ 1.15 = 200.

 

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Common Mistakes and Quick Checks

• Mixing up bases. Ask, “Percent of what?” at every step.
• Adding successive percents. Multiply factors instead.
• Dropping the sign. Label increase or decrease clearly.
• Skipping a sense check. If a value falls from 100 to 80, the decrease must be less than 50%, not more.
• Ignoring units. Prices, counts, and rates behave the same, but keep units in view.

A Simple Exam Routine

1. Underline the old value and the new value.
2. Write the formula skeleton: (new − old) ÷ old × 100.
3. For multi-step changes, write each factor and multiply.
4. Box your sign and unit.
5. Do a quick reasonableness check before moving on.

This calm, repeatable sequence turns percentage change questions into dependable points.

Parting Thought

Clarity grows when you honor the base, write the factors, and check the sign. The same rhythm helps beyond the test, when you compare options, weigh tradeoffs, and plan steadily. If you wish to practice this flow under time pressure, try our 15 GMAT practice tests. Overall, for due results, ensure adequate practice and duly analyzing the mistakes.