The relative decrease change. Definition:
The relative decrease change is the difference in an indicator over two periods in time, v1 - v2, relative to the value of the indicator in the earlier period, v1.
- Where:
- v1 - is called the reference value (original, initial number);
- v2 - is called the new value (the end value).
- In our case: v1 = 0.02, v2 = - 0.059.
The relative decrease change. Formula:
The relative decrease change =
The actual change / |v1|
(v1 - v2) / |v1| =
- Legend:
- v1 - the original number
- |v1| - the positive value of v1, |v1| >= 0. By example: |10| = 10; |-10| = 10.
- v2 - the new value
- The actual change = v1 - v2
- / - the fraction bar (division)
Why do we use |v1| in the formula instead of v1?
- Let's see what happens if we use v1 instead of |v1|:
- Choose a random negative number as the initial value: - 93.
- Choose a random positive number for the end value: 78.
Formula and calculation:
(v1 - v2) / v1 =
(- 93 - 78) / - 93 =
-171 / - 93 ≈
1.838709677419 ≈
1.84
Although the absolute difference is negative: -171, the relative decrease change is positive: 1.84. By using |v1| instead of v1, the error is corrected.
The relative percent decrease change. Detailed calculations below
By multiplying a number by the fraction 100/100,
we change only the form of the result, not the result.
- 100/100 = 100% = 100 ÷ 100 = 1.
- n × 100/100 = (n × 100)/100 = (n × 100)%, any number.
The relative percent decrease change. Formula:
The relative percent decrease change =
The relative decrease change × 100/100 =
(The relative decrease change × 100)/100 =
(The relative decrease change × 100)%
Calculate the relative percent decrease change:
(0.02 - (- 0.059))/|0.02| =
(0.02 + 0.059)/|0.02| =
0.079/0.02 =
0.079 ÷ 0.02 =
0.079 ÷ 0.02 × 100/100 =
(0.079 × 100 ÷ 0.02)/100 =
(7.9 ÷ 0.02)/100 =
395/100 =
395%
The relative percent decrease change
from the original, initial value 0.02 to the final, end value - 0.059:
= 395%
The absolute (actual) difference
0.02 + 0.059 = 0.079 ≈ 0.08
By what percentage has 0.02 decreased?
Answer: By 395%
By what percentage is - 0.059 smaller than 0.02?
Answer: By 395%
The relative percent decrease change is positive,
so we really have a relative percent decrease
(the value goes down).