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.
- Namely:
- v1 - is called the reference value (original, initial number);
- v2 - is called the new value (the end value).
- In our case: v1 = - 20, v2 = 617.5.
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: - 48.
- Choose a random positive number for the end value: 96.
Formula and calculation:
(v1 - v2) / v1 =
(- 48 - 96) / - 48 =
-144 / - 48 =
3
Although the absolute difference is negative: -144, the relative decrease (change) is positive: 3. 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):
(- 20 - 617.5)/|- 20| =
- 637.5/20 =
- 637.5 ÷ 20 =
- 637.5 ÷ 20 × 100/100 =
(- 637.5 × 100 ÷ 20)/100 =
(- 63,750 ÷ 20)/100 =
- 3,187.5/100 =
- 3,187.5%
The relative percent decrease (change)
from the original, initial value - 20 to the final, end value 617.5:
= - 3,187.5%
The absolute (actual) difference
- 20 - (617.5) = - 20 - 617.5 = - 637.5
The relative percent decrease (change) is negative,
so in this case we really have a relative percent increase instead
(the value goes up).