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 = 50.1.
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: - 31.
- Choose a random positive number for the end value: 73.
Formula and calculation:
(v1 - v2) / v1 =
(- 31 - 73) / - 31 =
-104 / - 31 ≈
3.354838709677 ≈
3.35
Although the absolute difference is negative: -104, the relative decrease change is positive: 3.35. 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 - 50.1)/|5,000| =
4,949.9/5,000 =
4,949.9 ÷ 5,000 =
4,949.9 ÷ 5,000 × 100/100 =
(4,949.9 × 100 ÷ 5,000)/100 =
(494,990 ÷ 5,000)/100 =
98.998/100 =
98.998% ≈
99%
(Rounded off to max. 2 decimal places)
The relative percent decrease change
from the original, initial value 5,000 to the final, end value 50.1:
Not rounded = 98.998%
Rounded off to max. 2 decimal places ≈ 99%
The absolute (actual) difference
5,000 - 50.1 = 4,949.9
By what percentage has 5,000 decreased?
Answer: By ≈ 99%
By what percentage is 50.1 smaller than 5,000?
Answer: By ≈ 99%
The relative percent decrease change is positive,
so we really have a relative percent decrease
(the value goes down).