Financial Modeling Tutorials

- Financial Modeling Basics
- Excel Modeling
- Financial Functions in Excel
- Sensitivity Analysis in Excel
- Time Value of Money
- Future Value Formula
- Present Value Factor
- Perpetuity Formula
- Present Value vs Future Value
- Annuity vs Pension
- Present Value of an Annuity
- Doubling Time Formula
- Annuity Formula
- Annuity vs Perpetuity
- Annuity vs Lump Sum
- Internal Rate of Return (IRR)
- NPV vs XNPV
- NPV vs IRR
- NPV Formula
- PV vs NPV
- IRR vs ROI
- Break Even Point
- Payback Period & Discounted Payback Period
- Payback period Formula
- Discounted Payback Period Formula
- Profitability Index
- Cash Burn Rate
- Simple Interest
- Simple Interest vs Compound Interest
- Simple Interest Formula
- CAGR Formula (Compounded Annual Growth Rate)
- Effective Interest Rate
- Loan Amortization Schedule
- Mortgage Formula
- Loan Principal Amount
- Interest Rate Formula
- Rate of Return Formula
- Effective Annual Rate
- Effective Annual Rate Formula (EAR)
- Daily Compound Interest
- Monthly Compound Interest Formula
- Discount Rate vs Interest Rate
- Rule of 72
- Geometric Mean Return
- Real Rate of Return Formula
- Continuous compounding Formula
- Weighted average Formula
- Average Formula
- Average Rate of Return Formula
- Mean Formula
- Weighted Mean Formula
- Harmonic Mean Formula
- Median Formula in Statistics
- Range Formula
- Expected Value Formula
- Exponential Growth Formula
- Margin of Error Formula
- Decrease Percentage Formula
- Percent Error Formula
- Holding Period Return Formula
- Cost Benefit Analysis
- Cost Volume Profit Analysis
- Opportunity Cost Formula
- Mortgage APR vs Interest Rate
- Regression Formula
- Correlation Coefficient Formula
- Covariance Formula
- Coefficient of Variation Formula
- Sample Standard Deviation Formula
- Relative Standard Deviation Formula
- Volatility Formula
- Binomial Distribution Formula
- Quartile Formula
- P Value Formula
- Skewness Formula
- Regression vs ANOVA

**Percent Error Formula (Table of Contents)**

## What is Percent Error Formula?

In Science-related matters, the concept of percentage error formula is used often wherein the variance between the experimental value and the exact value is to be determined. This calculation will help us in comparing a value that is derived from the experiment with exact or true value. The percentage error also provides information as to how close is one in their measurement or their estimation to the true or the real value.

Below is the percent Error formula:

### Steps to Calculate Percent Error

The formula for Percent error one can follow the below steps:

**Step 1:** First one needs to obtain the experiment (assumed) value and the exact value.

**Step 2:** Find the variance between them and then take the absolute value that is one needs to ignore any negative sign if any. This is known as the error.

**Step 3:** Next, find out the absolute value of exact or true value.

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**Step 4:** Divide the absolute error (non-negative) which was determined in step 2, by absolute true value or the exact value.

** Step 5:** Now, finally multiply the result that is obtained in step 4 by 100 so that the result is converted into percent value and then add a “%” symbol to the result.

**Examples of Percent Error Formula (with Excel Template)**

Let’s see some simple to advanced examples of Percent Error Formula to understand it better.

#### Percent Error Formula – Example #1

**New tourist place statue of unity was established recently in Gujarat in India and it was estimated that around 3,00,000 people would turn around on its inauguration day. But the exact number of people that came for its inauguration was around 2,88,000. You are required to calculate the percentage error.**

Below is given data for calculation of Percent Error

Therefore, calculation of the Percent Error will be as follows,

=(300000-288000)/288000*100

**Percent Error will be –**

Percentage Error= 4.17%

#### Percent Error Formula – Example #2

**Avenue Supermarket a retail company operating under name “Dmart” is an expansion phase and the company plans to open new branches in new cities. At the start of the financial year, the company planned and estimated to open 24 branches, however by the end of the year the company opened only 21 stores. The company has approached you to calculate percentage error that they made during initial planning.**

Below is given data for calculation of Percent Error

Therefore, calculation of the Percent Error will be as follows,

=(24-21)/21*100

**Percent Error will be –**

Percentage Error= 14.29%

#### Percent Error Formula – Example #3

**As per a poll that was conducted by news channel during an election campaign where they estimated for XYZ party to win 278 seats out of 350 seats. After the results came out it turned out that XYZ party managed to win 299 seats out of 350 seats. The News channel is perplexed by the actual outcome and now wants to know what margin error they made and how much they lagged. Calculate the percentage error.**

Below is given data for calculation of Percent Error

Therefore, calculation of the Percent Error will be as follows,

**Percent Error will be –**

Percentage Error=-7.02%

**NOTE:**Even though in this example the output came in negative but with symbols “|” which stands for absolute value and hence the number +21 is derived.

### Relevance and Uses of Percent Error Formula

The percent error appears to be a simple calculation, but it is very useful as it provides us with a number which will depict our error. Further, it is used whenever it is crucial to know the amount of error which is present in the data and it is necessary to know the reason of the error, whether the reason is due to by equipment impairment or by one’s own error or mistake in the assumptions or estimations.

### Recommended Articles

This has been a guide to Percent Error Formula. Here we discuss how to calculate Percent Error in excel with examples and downloadable excel template. You can learn more about financing from the following articles –

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