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 = 17.4, v2 = 12.18.
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: - 87.
- Choose a random positive number for the end value: 49.
Formula and calculation:
(v1 - v2) / v1 =
(- 87 - 49) / - 87 =
-136 / - 87 ≈
1.563218390805 ≈
1.56
Although the absolute difference is negative: -136, the relative decrease change is positive: 1.56. 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:
(17.4 - 12.18)/|17.4| =
5.22/17.4 =
5.22 ÷ 17.4 =
5.22 ÷ 17.4 × 100/100 =
(5.22 × 100 ÷ 17.4)/100 =
(522 ÷ 17.4)/100 =
30/100 =
30%
The relative percent decrease change
from the original, initial value 17.4 to the final, end value 12.18:
= 30%
The absolute (actual) difference
17.4 - 12.18 = 5.22
By what percentage has 17.4 decreased?
Answer: By 30%
By what percentage is 12.18 smaller than 17.4?
Answer: By 30%
The relative percent decrease change is positive,
so we really have a relative percent decrease
(the value goes down).