What’s the Difference Between Percent and Percentage?

These two terms, percent and percentage, seem very similar, but there are very important differences between them.

Percent (or per cent) is simply the way we pronounce and spell the symbol “%.” A number with this symbol (e.g. 25%) is called a percentage. We use the word “percentage” to contrast with other types of numbers, like fractions (e.g. ¼).

What’s the difference between ten percent and ten percentage points?

Percentage points are useful for talking about changes in percentages. Let’s look at a simple example. There’s a country where people bought 1,000,000 cars in 2014. 200,000 of those cars were Toyotas. So we can say that Toyota’s market share was twenty percent (20%) — literally, twenty out of (“per”) every hundred (“cent”) cars.

Now let’s say Toyota’s market share went up by 10% in 2015. What is its market share now? Most people instinctively say “30%,” because twenty plus ten makes thirty. But you can’t do that with percentages. In fact, Toyota’s market share has increased by 10% of the original amount, twenty. In other words, it’s now 22%.

If you want to say that Toyota’s market share has gone up from 20% to 30%, you can say it has increased by ten percentage points.

There’s a big difference between a market share of 22% and 30%! As this simple example shows, it’s absolutely essential that you know when you’re talking about percent and when it’s percentage points.

Another example of the difference between percent and percentage points

Marketers often use this confusion to make their products sound better than they really are. Let’s say you see an advert for a course that promises to increase your chances of getting a job at Google by 90%. You might think you’re almost certain to get the job after finishing the course.

Unfortunately, you only had a 1% chance of getting your dream job before doing the course. So all you’re doing is increasing that chance to 1.9% — in other words, almost no chance. A course that increased your chances by ninety percentage points would indeed be wonderful, but that’s not what they’re promising.

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Originally published at www.GetNewsmart.com