Decrease Percentage Formula

Formula to Calculate Decrease Percentage

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

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

You are free to use this image on your website, templates etc, Please provide us with an attribution linkHow to Provide Attribution?Article Link to be Hyperlinked
For eg:
Source: Decrease Percentage Formula (wallstreetmojo.com)

Examples

You can download this Decrease Percentage Formula Excel Template here – Decrease Percentage Formula Excel Template

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 of the commodities or items losses their market value after it is bought. This situation is applicable in the case of a laptop.

The following is given data for calculation of the decrease percentage of the laptop.

Decrease percent formula example 1

Therefore, the calculation of percentage decrease is as follows,

= ($400 – $750)/$400

Decrease percent formula example 1.1jpg

Percentage Decrease will be –

example 1.2jpg
  • 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 decrease 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’re going to sell the car after three years, the market value of the vehicle will become $20,000 even though it is only 3 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 of the commodities or items losses their market value after it is bought. This situation is applicable in the case of a car.

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

Example 2

Therefore, the calculation of percentage decrease is as follows,

= ($20,000 – $35,000)/$20,000

decrease percent example 2.1jpg

Percentage Decrease will be –

example 2.2jpg
  • 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 decrease 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 prices 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.

example 3

Therefore, the calculation of percentage decrease is as follows,

= ($67 – $78)/$67

decrease percentage example3.1

Percentage Decrease will be –

example 3.2
  • 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.

Final Value
Initial Value
Decrease Percentage Formula =
 

Decrease Percentage Formula =
Final Value-Initial Value
X100
Initial Value
0-0
X100= 0
0

Relevance and Uses

The percentage decrease equation helps in determining the percentage by which the value of the underlying has decreased in actual. It is also used a lot in the world of finance as well to determine who much the value of the shares has decreased in percentage, or how much the overall portfolio has decreased.

It also helps to a great deal in making the comparisons. Like for example, if the portfolio has seen a percentage decrease and the index which the portfolio is trying to track and emulate has also seen a percentage decrease, then the formula helps in comparing which of the two has fallen more, thus helping in making a decision 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 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 with the initial value. This will give us the percentage decrease in the value of an underlying. The percentage decrease is an important concept as in real life, most of the items losses their value the moment it is bought or taken out of the shop or showroom.

The percentage decrease is an important concept as in real life; most of the items losses their value the moment it is bought or used by one user. The percentage decrease equation is also used a lot in the world of finance as well to determine who 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 in order to make comparisons.

Recommended Articles

This has been a guide to Decrease Percentage Formula. Here we discuss how to calculate Percentage Decrease with examples and a downloadable excel template. You can learn more about financing from the following articles –

Reader Interactions

Leave a Reply

Your email address will not be published. Required fields are marked *