Decrease Percentage Formula (2023)

Formula to Calculate Decrease Percentage

Decrease Percentage is used to determine the decrease in two values (final value and initial value) in percentage terms, and according to the formula, the initial value is subtracted from the final value. The resultant is divided by the initial value and multiplied by 100 to derive the decreased percentage.

Decrease Percentage = (Final value – Initial value)/ Initial Value *100

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Source: Decrease Percentage Formula (wallstreetmojo.com)

Examples

Example #1

If we buy a laptop for $750 and after a year, we want to change the laptop because the technology has evolved, and our need has also changed to the extent that we need the upgraded version with more space and speed, and performance. If you want to sell the laptop after a year, the market value of the laptop will become $400 even though it is only one year old and is kept in excellent condition. We can find the percentage decrease for the laptop with the help of the percentage decrease formula.

In the real world, most commodities or items lose their market value after buying them. This situation is applicable in the case of a laptop.

The following is given data for calculating the laptop’s decreased percentage.

Therefore, the calculation of the percentage decrease is as follows,

= ($400 – $750)/$400

Percentage Decrease will be –

• Decrease Percentage = -47%

In this example, for the price of the laptop, we can see that the percentage decrease in the value of the laptop is 47%. The reason for the decrease in prices is an advancement in technology, and also, in general, in the real world, the value of an underlying decreases in market value once one user uses it.

Example #2

Suppose we buy a car for $35,000, and after three years, we want to sell the old car and buy a new car as our needs and requirements have changed. If you sell the car after three years, the vehicle’s market value will become $20,000, even though it is only three years old and is kept in perfect condition. We can find the percentage decrease for the car with the help of the percentage decrease formula.

In the real world, most commodities or items lose their market value after buying them. This situation is applicable in the case of a car.

The following is given data for calculation of the decreased percentage of the car.

Therefore, the calculation of the percentage decrease is as follows,

= ($20,000 – $35,000)/$20,000

Percentage Decrease will be –

• Decrease Percentage = -43%

In this example, for the price of the laptop, we can see that the percentage decrease in the value of the laptop is 43%. The reason for the decrease in prices is an advancement in technology, and also, in general, in the real world, the value of an underlying decreases in market value once one user uses it.

Example #3

Let us look at a more practical example to use the concept of percentage decrease. The price of Brent crude in NYMEX was $78 per barrel a year back. It is trading at $ 67 currently. We can find the percentage decrease for Brent crude oil with the help of the percentage decrease formula.

Below is given data for calculation of the percentage decrease of Brent crude.

Therefore, the calculation of the percentage decrease is as follows,

= ($67 – $78)/$67

Percentage Decrease will be –

• Percentage Decrease = -14%

In this example, for the price of the laptop, we can see that the percentage decrease in the value of the laptop is 14%.

Percentage Decrease Calculator

You can use the following Decrease Percentage Calculator.

Relevance and Uses

The percentage decrease equation helps in determining the percentage by which the value of the underlying has decreased in actuality. It is also used in finance to determine how much the value of the shares has decreased or how much the overall portfolio has decreased.

It also helps a great deal in making comparisons. For example, suppose the portfolio has seen a percentage decrease and the index the portfolio is trying to track and emulate has also decreased. In that case, the formula helps in comparing which of the two has fallen more, thus helping in deciding on whether to make any changes to the portfolio.

Percentage decrease is a very important mathematical concept to find the difference between the final value and the initial of any underlying. The method to calculate the decrease percentage is to find the difference between the final value of an underlying and the initial value of the same underlying and then divide that difference by the initial value. This will give us a percentage decrease in the value of an underlying. The percentage decrease is an important concept as, in real life, most items lose their value when bought or taken out of the shop or showroom.

The percentage decrease is an important concept as, in real life, most items lose their value once bought or used by one user. The percentage decrease equation is also used a lot in the world of finance to determine how much the value of the shares has decreased in percentage or how much the overall portfolio has decreased. The percentage decrease equation is also used to find the percentage decline across commodities to make comparisons.

Recommended Articles

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