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 = 1,250, v2 = 1,485.4.
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: - 42.
- Choose a random positive number for the end value: 60.
Formula and calculation:
(v1 - v2) / v1 =
(- 42 - 60) / - 42 =
-102 / - 42 ≈
2.428571428571 ≈
2.43
Although the absolute difference is negative: -102, the relative decrease change is positive: 2.43. 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 - 1,485.4)/|1,250| =
- 235.4/1,250 =
- 235.4 ÷ 1,250 =
- 235.4 ÷ 1,250 × 100/100 =
(- 235.4 × 100 ÷ 1,250)/100 =
(- 23,540 ÷ 1,250)/100 =
- 18.832/100 =
- 18.832% ≈
- 18.83%
(Rounded off to max. 2 decimal places)
The relative percent decrease change
from the original, initial value 1,250 to the final, end value 1,485.4:
Not rounded = - 18.832%
Rounded off to max. 2 decimal places ≈ - 18.83%
The absolute (actual) difference
1,250 - 1,485.4 = - 235.4
By what percentage has 1,250 decreased?
Answer: By ≈ - 18.83%
By what percentage is 1,485.4 smaller than 1,250?
Answer: By ≈ - 18.83%
The relative percent decrease change is negative,
so in this case we really have a relative percent increase instead
(the value goes up).