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 = 800, v2 = 700.
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: - 12.
- Choose a random positive number for the end value: 43.
Formula and calculation:
(v1 - v2) / v1 =
(- 12 - 43) / - 12 =
-55 / - 12 ≈
4.583333333333 ≈
4.58
Although the absolute difference is negative: -55, the relative decrease change is positive: 4.58. 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:
(800 - 700)/|800| =
100/800 =
100 ÷ 800 =
100 ÷ 800 × 100/100 =
(100 × 100 ÷ 800)/100 =
(10,000 ÷ 800)/100 =
12.5/100 =
12.5%
The relative percent decrease change
from the original, initial value 800 to the final, end value 700:
= 12.5%
The absolute (actual) difference
800 - 700 = 100
By what percentage has 800 decreased?
Answer: By 12.5%
By what percentage is 700 smaller than 800?
Answer: By 12.5%
The relative percent decrease change is positive,
so we really have a relative percent decrease
(the value goes down).