To determine what a price decrease or increase represents, you need to calculate the percentage cost savings. This basic calculation is quite simple. You can calculate this percentage manually or using a spreadsheet program such as Microsoft Excel. To calculate it, you need the discounted (current) price and the original selling price.
Step
Method 1 of 2: Calculating Cost Savings Manually
Step 1. Determine the original price of the product or service
In most cases, this price is the retail price before deducting any coupons or discounts.
- For example, if the retail price of a shirt is IDR 50,000, then that price is the original price.
- For services that charge an hourly rate, multiply the service rate by the number of hours of service usage
Step 2. Determine the new price for the product or service
This price is charged after deducting any sales promotions, discounts, coupons, or deals obtained from the transaction.
For example, if you pay Rp. 40,000 for a jacket after deducting the discount, the new price of the jacket will be Rp. 40,000
Step 3. Determine the price difference
The trick, reduce the original price with the new price.
In this example, the difference in price is Rp. 50,000-Rp. 40,000 which is Rp. 10,000
Step 4. Divide the price difference by the original price
In this example, the difference of IDR 10,000 divided by the original price of IDR 50,000 is 0.2.
Step 5. Multiply the decimal number by 100 (or move the decimal point two digits to the right) to get a percentage number
In this example, 0.2 * 100 is 20%. This means that you save 20 percent of the purchase of a jacket.
Method 2 of 2: Calculating Cost Savings with Microsoft Excel
Step 1. Type the original price of the product or service in cell A1 and press enter
For example, if the original price of the computer was $2,000,000, type “2000000” in cell A1.
Step 2. Type the final price after deducting the discount in cell B1 and press enter
For example, you pay Rp. 1,500,000" to buy a computer, type "1500000" in cell B1.
Step 3. Type the formula “=A1-B1” in cell C1 and press enter
Excel will automatically calculate the difference between the two prices and the result will be displayed in the cell where you wrote the formula.
In this example, the number in cell C1 should be “50000”, if the formula was entered correctly
Step 4. Type the formula “=C1/A1” in cell D1 and press enter
Excel will divide the price difference by the original price
In this example, the number value in cell D1 should be “0.25” if the formula was entered correctly
Step 5. Select cell D1 with cursor and click “CRTL+SHIFT+%”
Excel will convert the decimal number to a percentage.
In this example, the value in cell E1 should be 25%, meaning that purchasing a computer saves 25% in costs
Step 6. Enter the new values into cells A1 and B1 to calculate the cost savings from other purchases
because the formula is entered in another cell, Excel will automatically update the cost savings when changing the original price or final price, or both.
For example, let's say you buy a lamp for Rp. 100,000 which the original price is Rp. 170,000. Enter the numbers "170000" in cell A1 and "100000" in cell B1, then leave the other cells untouched. The result that emerged at E1 was a 41% cost savings
Things You'll Need
- Original price and current price
- Calculator
