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 = 738.
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: - 7.
- Choose a random positive number for the end value: 12.
Formula and calculation:
(v1 - v2) / v1 =
(- 7 - 12) / - 7 =
-19 / - 7 ≈
2.714285714286 ≈
2.71
Although the absolute difference is negative: -19, the relative decrease change is positive: 2.71. 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 - 738)/|800| =
62/800 =
62 ÷ 800 =
62 ÷ 800 × 100/100 =
(62 × 100 ÷ 800)/100 =
(6,200 ÷ 800)/100 =
7.75/100 =
7.75%
The relative percent decrease change
from the original, initial value 800 to the final, end value 738:
= 7.75%
The absolute (actual) difference
800 - 738 = 62
By what percentage has 800 decreased?
Answer: By 7.75%
By what percentage is 738 smaller than 800?
Answer: By 7.75%
The relative percent decrease change is positive,
so we really have a relative percent decrease
(the value goes down).