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 = 8, v2 = 9.
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: - 83.
- Choose a random positive number for the end value: 1.
Formula and calculation:
(v1 - v2) / v1 =
(- 83 - 1) / - 83 =
-84 / - 83 =
1.012048192771 ≈
1.01
Although the absolute difference is negative: -84, the relative decrease change is positive: 1.01. 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:
(8 - 9)/|8| =
- 1/8 =
- 1 ÷ 8 =
- 1 ÷ 8 × 100/100 =
(- 1 × 100 ÷ 8)/100 =
(- 100 ÷ 8)/100 =
- 12.5/100 =
- 12.5%
The relative percent decrease change
from the original, initial value 8 to the final, end value 9:
= - 12.5%
The absolute (actual) difference
8 - 9 = - 1
By what percentage has 8 decreased?
Answer: By - 12.5%
By what percentage is 9 smaller than 8?
Answer: By - 12.5%
The relative percent decrease change is negative,
so in this case we really have a relative percent increase instead
(the value goes up).