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 = 55,000, v2 = 58,015.7.
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: - 22.
- Choose a random positive number for the end value: 85.
Formula and calculation:
(v1 - v2) / v1 =
(- 22 - 85) / - 22 =
-107 / - 22 ≈
4.863636363636 ≈
4.86
Although the absolute difference is negative: -107, the relative decrease change is positive: 4.86. 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:
(55,000 - 58,015.7)/|55,000| =
- 3,015.7/55,000 =
- 3,015.7 ÷ 55,000 =
- 3,015.7 ÷ 55,000 × 100/100 =
(- 3,015.7 × 100 ÷ 55,000)/100 =
(- 301,570 ÷ 55,000)/100 ≈
- 5.483090909091/100 =
- 5.483090909091% ≈
- 5.48%
(Rounded off to max. 2 decimal places)
The relative percent decrease change
from the original, initial value 55,000 to the final, end value 58,015.7:
Rounded off to max. 12 decimal places ≈ - 5.483090909091%
Rounded off to max. 2 decimal places ≈ - 5.48%
The absolute (actual) difference
55,000 - 58,015.7 = - 3,015.7
By what percentage has 55,000 decreased?
Answer: By ≈ - 5.48%
By what percentage is 58,015.7 smaller than 55,000?
Answer: By ≈ - 5.48%
The relative percent decrease change is negative,
so in this case we really have a relative percent increase instead
(the value goes up).