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 = 1,076.4.
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: - 57.
- Choose a random positive number for the end value: 91.
Formula and calculation:
(v1 - v2) / v1 =
(- 57 - 91) / - 57 =
-148 / - 57 ≈
2.59649122807 ≈
2.6
Although the absolute difference is negative: -148, the relative decrease (change) is positive: 2.6. 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 - 1,076.4)/|1,250| =
173.6/1,250 =
173.6 ÷ 1,250 =
173.6 ÷ 1,250 × 100/100 =
(173.6 × 100 ÷ 1,250)/100 =
(17,360 ÷ 1,250)/100 =
13.888/100 =
13.888% ≈
13.89%
(Rounded off to max. 2 decimal places)
The relative percent decrease (change)
from the original, initial value 1,250 to the final, end value 1,076.4:
Not rounded = 13.888%
Rounded off to max. 2 decimal places ≈ 13.89%
The absolute (actual) difference
1,250 - 1,076.4 = 173.6
The relative percent decrease (change) is positive,
so we really have a relative percent decrease
(the value goes down).