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 = 40,000, v2 = 1,799,981.6.
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: - 9.
- Choose a random positive number for the end value: 7.
Formula and calculation:
(v1 - v2) / v1 =
(- 9 - 7) / - 9 =
-16 / - 9 ≈
1.777777777778 ≈
1.78
Although the absolute difference is negative: -16, the relative decrease change is positive: 1.78. 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:
(40,000 - 1,799,981.6)/|40,000| =
- 1,759,981.6/40,000 =
- 1,759,981.6 ÷ 40,000 =
- 1,759,981.6 ÷ 40,000 × 100/100 =
(- 1,759,981.6 × 100 ÷ 40,000)/100 =
(- 175,998,160 ÷ 40,000)/100 =
- 4,399.954/100 =
- 4,399.954% ≈
- 4,399.95%
(Rounded off to max. 2 decimal places)
The relative percent decrease change
from the original, initial value 40,000 to the final, end value 1,799,981.6:
Not rounded = - 4,399.954%
Rounded off to max. 2 decimal places ≈ - 4,399.95%
The absolute (actual) difference
40,000 - 1,799,981.6 = - 1,759,981.6
By what percentage has 40,000 decreased?
Answer: By ≈ - 4,399.95%
By what percentage is 1,799,981.6 smaller than 40,000?
Answer: By ≈ - 4,399.95%
The relative percent decrease change is negative,
so in this case we really have a relative percent increase instead
(the value goes up).