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 = 2,000, v2 = 105.
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: - 26.
- Choose a random positive number for the end value: 67.
Formula and calculation:
(v1 - v2) / v1 =
(- 26 - 67) / - 26 =
-93 / - 26 =
3.576923076923 ≈
3.58
Although the absolute difference is negative: -93, the relative decrease change is positive: 3.58. 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:
(2,000 - 105)/|2,000| =
1,895/2,000 =
1,895 ÷ 2,000 =
1,895 ÷ 2,000 × 100/100 =
(1,895 × 100 ÷ 2,000)/100 =
(189,500 ÷ 2,000)/100 =
94.75/100 =
94.75%
The relative percent decrease change
from the original, initial value 2,000 to the final, end value 105:
= 94.75%
The absolute (actual) difference
2,000 - 105 = 1,895
By what percentage has 2,000 decreased?
Answer: By 94.75%
By what percentage is 105 smaller than 2,000?
Answer: By 94.75%
The relative percent decrease change is positive,
so we really have a relative percent decrease
(the value goes down).