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 = 240,000, v2 = 210,001.5.
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: - 93.
- Choose a random positive number for the end value: 60.
Formula and calculation:
(v1 - v2) / v1 =
(- 93 - 60) / - 93 =
-153 / - 93 ≈
1.645161290323 ≈
1.65
Although the absolute difference is negative: -153, the relative decrease change is positive: 1.65. 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:
(240,000 - 210,001.5)/|240,000| =
29,998.5/240,000 =
29,998.5 ÷ 240,000 =
29,998.5 ÷ 240,000 × 100/100 =
(29,998.5 × 100 ÷ 240,000)/100 =
(2,999,850 ÷ 240,000)/100 =
12.499375/100 =
12.499375% ≈
12.5%
(Rounded off to max. 2 decimal places)
The relative percent decrease change
from the original, initial value 240,000 to the final, end value 210,001.5:
Not rounded = 12.499375%
Rounded off to max. 2 decimal places ≈ 12.5%
The absolute (actual) difference
240,000 - 210,001.5 = 29,998.5
By what percentage has 240,000 decreased?
Answer: By ≈ 12.5%
By what percentage is 210,001.5 smaller than 240,000?
Answer: By ≈ 12.5%
The relative percent decrease change is positive,
so we really have a relative percent decrease
(the value goes down).