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Chapter 11: Index Number 11.1 Index Number Price Index: Page 1 of 3
Chapter 11: Index Number 11.1 Index Number Price Index: Page 1 of 3
Price index
I=
P1
100
P0
Page 1 of 3
Composite index
I = IW
W
where I = price index
W = weightage
Example 4
Noodle
Fried noodle
Tomyam noodle
Seafood noodle
Wantan noodle
Price Index, I
112
104
109
111
Weightage, W
4
3
2
1
The above table shows the price indices of a few types of noodles sold at a shop for
the year 2000 based on the year 1996 and their respective weightages. Calculate the
composite index for the year 2000 based on the year 1996.
Price Index, I
110
x
120
115
Weightage, W
4
2
1
3
The above table shows the price indices of a few types of items, P, Q, R and S for the
year 2002 based on the year 1997 and their respective weightages. If the composite
index for the year 2002 based on the year 1997 is 116.5, find the value of x.
Page 2 of 3
Example 6
An electrical item consists of four major components P, Q, R and S. The following
table shows the price indices and the respective weightages of these components in
the year 2007 based on the year 2006.
Component
P
Q
R
S
Price Index, I
110
105
150
119
Weightage, W
5
x
5
1
The composite index representing the cost of production of the electrical item is 127
in the year 2007 with respect to the year 2006. Find the value of x.
Page 3 of 3