How Reverse Percentage Works
What is "Reverse Percentage"?
This calculation helps you find the original value of a number before a (like a markup or tax) was added. It allows you to "reverse" the calculation when you only know the final amount and the percentage that was added to it.
Formula
Reverse Percentage Formula (After Increase)
Original Value = Final Value / (1 + Increase% / 100)
Final Value
= The amount after the increase
Increase%
= The percentage that was added
Original Value
= The starting number you're looking for
Step-by-Step Example
Problem: A product costs $120 after a 20% markup. What was the original cost?
Given:
Final Value = $120
Markup = 20%
Final Value = $120
Markup = 20%
Step 1: Convert increase to a multiplier
1 + (20 / 100) = 1.20
1 + (20 / 100) = 1.20
Step 2: Divide the final value by the multiplier
Original = $120 / 1.20 = $100
Original = $120 / 1.20 = $100
Answer: The original price was $100.
🎯 Tips & Common Mistakes
- Don't just subtract the percentage: If a price increased by 20%, you cannot find the original by subtracting 20% from the final price. This is because 20% of the final price is larger than 20% of the original.
- Markup vs. Discount: This formula assumes an increase. If you are calculating for a discount, you would use (1 - Percentage / 100) as your divisor.
❓ Frequently Asked Questions
What is a reverse percentage?
It is finding the original value after a percentage increase or decrease has been applied. You are 'reversing' the change.
How do I calculate the original price after a discount?
Divide the current price by (1 - discount rate as a decimal). If a shirt is after a 20% discount, calculate 20 / 0.8 = .
Why can't I just add the percentage back?
Because the percentage was taken from the *original* higher amount, not the new lower amount. Adding 20% to () won't get you back to .
🔍 Authoritative References
For more information about basic percentage calculations, consult these trusted sources:
- National Council of Teachers of Mathematics - Mathematics education standards
- Math is Fun - Clear mathematical explanations and examples