Question

The tax rate increased from 25% to 40%.a. What is the absolute change in percentage points? b. What is the relative change?

Answer 1

a. 15%

b. 60%

Step-by-step explanation:

Part a.

The absolute change in percentage points can be calculated as

`\text{ Absolute change = Final value - Initial value}`

So, by replacing the final value with 40% and the initial value with 25%, we get

`\text{ Absolute change = 40\%-25\% = 15\%}`

Therefore, the absolute change is 15%

Part b.

The relative change can be calculated as

`\text{ Relative change = }\frac{\text{ Final value - Initial Value}}{\text{ Initial value}}*100`

Replacing the final value with 40% and the initial value with 25%, we get

`\begin{gathered} \text{ Relative change = }\frac{\text{ 40\% - 25\%}}{\text{ 25\%}}*100 \\ \\ \text{ Relative change =}\frac{\text{ 15\%}}{\text{ 25\%}}*100 \\ \\ \text{ Relative change = 0.6}*100 \\ \text{ Relative change = 60\%} \end{gathered}`

Therefore, the relative change is 60%