Reductions refer to the amount of a decrease, such as a decrease in salary or a decrease in budget. Using a percentage to represent a reduction measures the amount of the reduction in relation to the original amount, rather than just a raw number. For example, a $5,000 decrease in salary for a president of a large company would be a lot less significant than a $5,000 decrease in salary for someone making $25,000 or $30,000 per year. Calculating such losses in terms of percentages helps put them in perspective.
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The formula for finding the percentage of reduction is:
P = a/b × 100
Where P is the percentage of reduction, a is the amount of the reduction and b is the original amount that was reduced.
Subtract to Find the Amount of the Reduction
Divide the Reduction by the Original Amount
Convert the Rate of Reduction to a Percentage
Subtract the final amount from the initial amount to find the amount of the reduction. For example, if your salary was $59,000 and it was reduced to $56,000, you'd have:
$59,000 - $56,000 = $3,000.
Divide the amount of the reduction by the original amount to find the rate of reduction. In this example, you have:
$3,000 ÷ $59,000 = 0.0508.
Multiply the rate of reduction by 100 to find the percentage reduction. In this example, you have:
0.0508 × 100 = 5.08 percent