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 = 120, v2 = 40.8.
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: - 51.
- Choose a random positive number for the end value: 34.
Formula and calculation:
(v1 - v2) / v1 =
(- 51 - 34) / - 51 =
-85 / - 51 ≈
1.666666666667 ≈
1.67
Although the absolute difference is negative: -85, the relative decrease change is positive: 1.67. 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:
(120 - 40.8)/|120| =
79.2/120 =
79.2 ÷ 120 =
79.2 ÷ 120 × 100/100 =
(79.2 × 100 ÷ 120)/100 =
(7,920 ÷ 120)/100 =
66/100 =
66%
The relative percent decrease change
from the original, initial value 120 to the final, end value 40.8:
= 66%
The absolute (actual) difference
120 - 40.8 = 79.2
By what percentage has 120 decreased?
Answer: By 66%
By what percentage is 40.8 smaller than 120?
Answer: By 66%
The relative percent decrease change is positive,
so we really have a relative percent decrease
(the value goes down).