Calculate Escalation Percentages: A Simple Guide

A basic calculator can be used to calculate escalation percentages.

Escalation is beneficial when adjusting payments for various alterations in prices. To determine a percentage for an escalation price, the formula for an escalation adjustment escalation must be known. It is important to be aware of both the starting and ending costs when figuring out escalation percentages. Knowing how to calculate escalation percentages puts you in charge of your finances; it enables you to figure out calculations on your own and identify price increases.

Step 1

Write down the initial cost of the expense you are planning to calculate. This is the price at the onset of the escalation period. For example, say the initial price is $12,000.

Step 2

Write down the current price of the expense and subtract that price from the current price. For instance, if $12,000 was your initial price and $14,050 is your current price, your end result--the price increase--is $2,050.

Step 3

Divide the price increase ($2,050) by the initial price ($12,000). The result is the escalation rate: 0.1708.

Step 4

Multiply the escalation rate (0.1708) by 100 to determine the escalation percentage. Your result for this example is 17.08 percent.