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 = 225,000, v2 = 204,995.
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: - 15.
- Choose a random positive number for the end value: 32.
Formula and calculation:
(v1 - v2) / v1 =
(- 15 - 32) / - 15 =
-47 / - 15 ≈
3.133333333333 ≈
3.13
Although the absolute difference is negative: -47, the relative decrease change is positive: 3.13. 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:
(225,000 - 204,995)/|225,000| =
20,005/225,000 =
20,005 ÷ 225,000 =
20,005 ÷ 225,000 × 100/100 =
(20,005 × 100 ÷ 225,000)/100 =
(2,000,500 ÷ 225,000)/100 ≈
8.891111111111/100 =
8.891111111111% ≈
8.89%
(Rounded off to max. 2 decimal places)
The relative percent decrease change
from the original, initial value 225,000 to the final, end value 204,995:
Rounded off to max. 12 decimal places ≈ 8.891111111111%
Rounded off to max. 2 decimal places ≈ 8.89%
The absolute (actual) difference
225,000 - 204,995 = 20,005
By what percentage has 225,000 decreased?
Answer: By ≈ 8.89%
By what percentage is 204,995 smaller than 225,000?
Answer: By ≈ 8.89%
The relative percent decrease change is positive,
so we really have a relative percent decrease
(the value goes down).