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 = 6,750, v2 = 6,347.7.
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: - 38.
- Choose a random positive number for the end value: 17.
Formula and calculation:
(v1 - v2) / v1 =
(- 38 - 17) / - 38 =
-55 / - 38 ≈
1.447368421053 ≈
1.45
Although the absolute difference is negative: -55, the relative decrease change is positive: 1.45. 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:
(6,750 - 6,347.7)/|6,750| =
402.3/6,750 =
402.3 ÷ 6,750 =
402.3 ÷ 6,750 × 100/100 =
(402.3 × 100 ÷ 6,750)/100 =
(40,230 ÷ 6,750)/100 =
5.96/100 =
5.96%
The relative percent decrease change
from the original, initial value 6,750 to the final, end value 6,347.7:
= 5.96%
The absolute (actual) difference
6,750 - 6,347.7 = 402.3
By what percentage has 6,750 decreased?
Answer: By 5.96%
By what percentage is 6,347.7 smaller than 6,750?
Answer: By 5.96%
The relative percent decrease change is positive,
so we really have a relative percent decrease
(the value goes down).