Index NumbersMCQPYQ June 22Question 3915 of 197
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The cost-of-living index number in year 2015\displaystyle 2015 and 2018\displaystyle 2018 were 97.5\displaystyle 97.5 and 115\displaystyle 115 respectively. The salary of CA Jitendra in 2015\displaystyle 2015 was 195000\displaystyle 195000. How much additional salary was required for him in 2018\displaystyle 2018 to maintain the same standard of living as in 2015\displaystyle 2015?

Options

A35,000\displaystyle 35,000
B40,000\displaystyle 40,000
C35,000\displaystyle 35,000
D45,000\displaystyle 45,000
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Correct Answer

Option a35,000\displaystyle 35,000

All Options:

  • A35,000\displaystyle 35,000
  • B40,000\displaystyle 40,000
  • C35,000\displaystyle 35,000
  • D45,000\displaystyle 45,000

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Detailed Solution & Explanation

We are given: - Cost of living index (CLI) in base year (2015) = 97.5\displaystyle 97.5 - Cost of living index (CLI) in current year (2018/2021) = 115\displaystyle 115 - Salary in base year (2015) = 195,000 To maintain the same standard of living, the salary in the current year should be adjusted proportionally to the CLI: Required Salary=Base Salary×Current CLIBase CLI=195,000×11597.5=230,000.00\text{Required Salary} = \text{Base Salary} \times \frac{\text{Current CLI}}{\text{Base CLI}} = 195,000 \times \frac{115}{97.5} = 230,000.00 Therefore, the additional salary required is: Additional Salary=Required SalaryBase Salary=230,000.00195,000=35,000.00\text{Additional Salary} = \text{Required Salary} - \text{Base Salary} = 230,000.00 - 195,000 = 35,000.00 This matches 35,000. Hence, **Option A** is the correct answer.

About This Chapter: Index Numbers

Paper

Paper 3: Quantitative Aptitude

Weightage

4-6 Marks

Key Topics

Construction of Index Numbers, Time Series

This chapter covers Construction of Index Numbers, Time Series and is part of Paper 3: Quantitative Aptitude in the CA Foundation exam.

View Official ICAI Syllabus

Exam Strategy Tip

This topic carries 4-6 Marks weightage. Focus on understanding core concepts rather than memorizing.

Key Concepts to Understand

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