An appraiser compares sales volume between two periods: 100 closed sales in the prior period and 112 in the current period. What is the percent change in sales volume?
Correct Answer
C) 12 percent
Percentage change = (112 − 100)/100 × 100 = 12%. Keep the stated numerator, denominator and units distinct. Common errors: dividing by the current figure instead of the prior figure gives 11 percent; reporting the current level as a percentage of the prior level gives 112 percent; misplacing the decimal (×10 instead of ×100) gives 1 percent.
Why This Is the Correct Answer
Option C is correct because percentage change = (112 - 100) / 100 x 100 = 12%. The prior period is the base, so the 12-sale increase is divided by 100.
Why the Other Options Are Wrong
Option A: 1 percent
Option A, 1 percent, comes from misplacing the decimal by multiplying by 10 instead of 100: (112 - 100) / 100 x 10 = 1.2, shown as 1. The correct result is (112 - 100) / 100 x 100 = 12%.
Option B: 11 percent
Option B, 11 percent, comes from dividing by the current figure instead of the prior figure: (112 - 100) / 112 x 100 = 10.7, about 11. The prior period is the base, giving 12%.
Option D: 112 percent
Option D, 112 percent, reports the current level as a percentage of the prior level: 112 / 100 x 100 = 112%. The change is 112% minus 100%, or 12%.
New minus old, over old
Percent change equals new minus old, divided by old, times 100.
How to use: Use this phrase on any period-to-period comparison of sales, prices or listings.
Exam Tip
Identify which figure is the starting period before dividing; the base is the earlier value.
Common Mistakes to Avoid
- -Dividing the change by the current-period figure
- -Reporting the ratio of current to prior as the change
- -Misplacing the decimal when converting to a percentage
Concept Deep Dive
Analysis
This question tests a basic percentage change calculation between two periods. Subtract the prior-period figure from the current figure and divide by the prior figure. The distractors use the wrong base, report a level instead of a change, or misplace the decimal.
Background Knowledge
Comparing closed sales across periods helps an appraiser judge whether market activity is increasing, stable or declining. Percentage change is measured relative to the starting (prior) value.
Real-World Application
An appraiser compares 100 closed sales in the prior period with 112 in the current period for a competing segment. She reports a 12% increase in sales volume as one indicator of improving demand.
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