Interest rate rises.

[Ghostwriter]

If the interest rate goes from 10 to 11% is it an increase of 1% or 10%?

 

[Jason Voorhees]

If the interest rate goes from 10 to 11% is it an increase of 1% or 10%?

I wouldn't like this question on a maths test thats for sure. I'll say 10%.

 

[Merv]

If the interest rate goes from 10 to 11% is it an increase of 1% or 10%?

It actually works on Basis Points.

Most rises are 25 BP which equates to a .25% rise

So a 100 BP rise will be a 1% rise

 

[Merv]

It can be expressed in two ways.
You can either say it is an increase of 1%, or an increase of 10%%

No it doesn't work like that.

It is an increase of 100 Basis Points on the current cash rate.

This equates to an increase of 100 Basis Points or 1%

 

[Bombfire]

No it doesn't work like that.

It is an increase of 100 Basis Points on the current cash rate.

This equates to an increase of 100 Basis Points or 1%

One could also say the 100 Basis Points increase of the Reserve Banks cash rate represents a percentage increase of 10% over the previous rate.

 

[Jimmy_the_Gent]

But technically if you are talking about a percentage increase on a percentage, you use the double percentage sign. (%%)

Is that like acceleration?

If the interest rate goes from 10 to 11% is it an increase of 1% or 10%?

Both.

It's up 1% because 11-10 = 1.

But it's up 10% of it's previous value, (i.e. (1/10) x100 = 10%) if you're measuring it as an increase in percentage of the previous value. See Retzlaff's %% thing.

In terms of interest rates though, Merv Neagle is correct, they go on basis points and it's probably like that to avoid this kind of confusion.

 

[Merv]

If it is an interest rate you are referring to, then yes it is convention to express the increase as an incremental one in terms of basis points.

But technically if you are talking about a percentage increase on a percentage, you use the double percentage sign. (%%)

Apologies Retzlaff, i wasn't aware of that.

Thanks for explaining that and i'm glad i have learned something new.

Cheers

 

[TheBloods]

If the interest rate goes from 10 to 11% is it an increase of 1% or 10%?

I normally describe it as an increase of 1% point or 100bp.

 

[Brad Goodman]

Obviously it is both an increase of 10% on the previous rate as well as an increase of 1 percentage point.

 

[emperor]

think i'll stick to quantifying it in terms of basis points much easier that way