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 = 50,000, v2 = 44,983.1.
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: - 55.
- Choose a random positive number for the end value: 61.
Formula and calculation:
(v1 - v2) / v1 =
(- 55 - 61) / - 55 =
-116 / - 55 ≈
2.109090909091 ≈
2.11
Although the absolute difference is negative: -116, the relative decrease change is positive: 2.11. 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:
(50,000 - 44,983.1)/|50,000| =
5,016.9/50,000 =
5,016.9 ÷ 50,000 =
5,016.9 ÷ 50,000 × 100/100 =
(5,016.9 × 100 ÷ 50,000)/100 =
(501,690 ÷ 50,000)/100 =
10.0338/100 =
10.0338% ≈
10.03%
(Rounded off to max. 2 decimal places)
The relative percent decrease change
from the original, initial value 50,000 to the final, end value 44,983.1:
Not rounded = 10.0338%
Rounded off to max. 2 decimal places ≈ 10.03%
The absolute (actual) difference
50,000 - 44,983.1 = 5,016.9
By what percentage has 50,000 decreased?
Answer: By ≈ 10.03%
By what percentage is 44,983.1 smaller than 50,000?
Answer: By ≈ 10.03%
The relative percent decrease change is positive,
so we really have a relative percent decrease
(the value goes down).