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 = 5,000, v2 = 4,034.1.
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: - 75.
- Choose a random positive number for the end value: 59.
Formula and calculation:
(v1 - v2) / v1 =
(- 75 - 59) / - 75 =
-134 / - 75 ≈
1.786666666667 ≈
1.79
Although the absolute difference is negative: -134, the relative decrease change is positive: 1.79. 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:
(5,000 - 4,034.1)/|5,000| =
965.9/5,000 =
965.9 ÷ 5,000 =
965.9 ÷ 5,000 × 100/100 =
(965.9 × 100 ÷ 5,000)/100 =
(96,590 ÷ 5,000)/100 =
19.318/100 =
19.318% ≈
19.32%
(Rounded off to max. 2 decimal places)
The relative percent decrease change
from the original, initial value 5,000 to the final, end value 4,034.1:
Not rounded = 19.318%
Rounded off to max. 2 decimal places ≈ 19.32%
The absolute (actual) difference
5,000 - 4,034.1 = 965.9
By what percentage has 5,000 decreased?
Answer: By ≈ 19.32%
By what percentage is 4,034.1 smaller than 5,000?
Answer: By ≈ 19.32%
The relative percent decrease change is positive,
so we really have a relative percent decrease
(the value goes down).