Find the Price Index Number using Simple Aggregate Method in the following example. Use 1995 as base year in the following problem. - Mathematics and Statistics

Sum

Find the Price Index Number using Simple Aggregate Method in the following example.

Use 1995 as base year in the following problem.

 Commodity A B C D E Price (in ₹) in 1995 42 30 54 70 120 Price (in ₹) in 2005 60 55 74 110 140

Solution

 Commodity Price in 1995(Base year) p0 Price in 2005(Current year)p1 A 42 60 B 30 55 C 54 74 D 70 110 E 120 140 Total 316 439

From the table, ∑ p0 = 316, ∑ p1 = 439

Price Index Number (P01) = (sum "p"_1)/(sum "p"_0) xx 100

= 439/316 xx 100

= 138.92

Concept: Construction of Index Numbers
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