# How to Calculate Cost Increase by a Percent

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Due to inflation and other factors, prices of goods rise. In a business, you need to know the size of the cost increases of the goods that you use so that you can adjust your prices accordingly. The price increase can be measured as a percentage of the previous price because a $0.50 increase is much more significant when the original price is$1 than when the original price equals $50. To find the cost increase expressed as a percentage, you need to know the original cost and the final cost. Subtract the original cost from the final cost. For example, if the cost of a part goes up from$5.60 to $6.10, subtract$5.60 from $6.10 to get$0.50.

Divide the cost increase by the original cost. In this example, divide $0.50 by$5.60 to get 0.0892857142857143.

Multiply the Step 2 result by 100 to find the cost increase expressed as a percent. Completing the example, multiply 0.0892857142857143 by 100 to find that the cost increase equals about 8.93 percent.