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, v2 = 60.8.
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: - 78.
- Choose a random positive number for the end value: 8.
Formula and calculation:
(v1 - v2) / v1 =
(- 78 - 8) / - 78 =
-86 / - 78 ≈
1.102564102564 ≈
1.1
Although the absolute difference is negative: -86, the relative decrease change is positive: 1.1. 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 - 60.8)/|50| =
- 10.8/50 =
- 10.8 ÷ 50 =
- 10.8 ÷ 50 × 100/100 =
(- 10.8 × 100 ÷ 50)/100 =
(- 1,080 ÷ 50)/100 =
- 21.6/100 =
- 21.6%
The relative percent decrease change
from the original, initial value 50 to the final, end value 60.8:
= - 21.6%
The absolute (actual) difference
50 - 60.8 = - 10.8
By what percentage has 50 decreased?
Answer: By - 21.6%
By what percentage is 60.8 smaller than 50?
Answer: By - 21.6%
The relative percent decrease change is negative,
so in this case we really have a relative percent increase instead
(the value goes up).