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.
- Namely:
- v1 - is called the reference value (original, initial number);
- v2 - is called the new value (the end value).
- In our case: v1 = 1,250, v2 = 1,064.8.
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: - 49.
- Choose a random positive number for the end value: 2.
Formula and calculation:
(v1 - v2) / v1 =
(- 49 - 2) / - 49 =
-51 / - 49 ≈
1.040816326531 ≈
1.04
Although the absolute difference is negative: -51, the relative decrease (change) is positive: 1.04. 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):
(1,250 - 1,064.8)/|1,250| =
185.2/1,250 =
185.2 ÷ 1,250 =
185.2 ÷ 1,250 × 100/100 =
(185.2 × 100 ÷ 1,250)/100 =
(18,520 ÷ 1,250)/100 =
14.816/100 =
14.816% ≈
14.82%
(Rounded off to max. 2 decimal places)
The relative percent decrease (change)
from the original, initial value 1,250 to the final, end value 1,064.8:
Not rounded = 14.816%
Rounded off to max. 2 decimal places ≈ 14.82%
The absolute (actual) difference
1,250 - 1,064.8 = 185.2
The relative percent decrease (change) is positive,
so we really have a relative percent decrease
(the value goes down).