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13. März 2014 · The difference between a percent and a percentage point isn't commonly known, so writers sometimes use it to deceive their audience. For instance, when President George W. Bush proposed partially privatizing Social Security in 2004, some commentators said that only "2 percent" of the average American's Social Security taxes would be funneled into private accounts.
For points, it’s often a straightforward subtraction: New Value – Original Value. Real-World Applications of Percentages and Points. 1. Finance and Investing. Interest Rates: If a loan has an interest rate of 4%, it means you owe 4% of the principal amount annually. If this rate rises by 2 percentage points, the new interest rate is 6%.
The proper phrase to use is “percentage point.” A “percentage point” is the mathematical difference between two percentages. However, the answer is not an exact percent, so you would not say “percent point.” For example, a 20% difference in two numbers, could actually equal just 2 “percentage points.”
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