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 = 600, v2 = 531.
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: - 58.
- Choose a random positive number for the end value: 55.
Formula and calculation:
(v1 - v2) / v1 =
(- 58 - 55) / - 58 =
-113 / - 58 ≈
1.948275862069 ≈
1.95
Although the absolute difference is negative: -113, the relative decrease change is positive: 1.95. 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:
(600 - 531)/|600| =
69/600 =
69 ÷ 600 =
69 ÷ 600 × 100/100 =
(69 × 100 ÷ 600)/100 =
(6,900 ÷ 600)/100 =
11.5/100 =
11.5%
The relative percent decrease change
from the original, initial value 600 to the final, end value 531:
= 11.5%
The absolute (actual) difference
600 - 531 = 69
By what percentage has 600 decreased?
Answer: By 11.5%
By what percentage is 531 smaller than 600?
Answer: By 11.5%
The relative percent decrease change is positive,
so we really have a relative percent decrease
(the value goes down).