Index NumbersMCQMTP June 24 Series IQuestion 3929 of 197
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Consumer price index number goes up from 110\displaystyle 110 to 200\displaystyle 200 and the salary of a worker is also raised from 7,000\displaystyle 7,000 to 12,000\displaystyle 12,000. Therefore, in real terms to maintain his previous standard of living he should get an additional amount of -

Options

A8500\displaystyle 8500
B10,000\displaystyle 10,000
C9825\displaystyle 9825
DNone of these
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Correct Answer

Option dNone of these

All Options:

  • A8500\displaystyle 8500
  • B10,000\displaystyle 10,000
  • C9825\displaystyle 9825
  • DNone of these

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Detailed Solution & Explanation

We are given: - Initial CPI (CPI0\displaystyle CPI_0) = 110\displaystyle 110 - Final CPI (CPI1\displaystyle CPI_1) = 200\displaystyle 200 - Initial Salary (S0\displaystyle S_0) = 7,000\displaystyle 7,000 - Revised Salary (S1\displaystyle S_1) = 12,000\displaystyle 12,000 1. **Calculate Required Salary to maintain base standard of living**: Required Salary=S0×CPI1CPI0=7000×20011012,727.27\text{Required Salary} = S_0 \times \frac{CPI_1}{CPI_0} = 7000 \times \frac{200}{110} \approx 12,727.27 2. **Calculate Additional Salary needed**: Additional Salary=Required SalaryS1=12727.2712000=727.27\text{Additional Salary} = \text{Required Salary} - S_1 = 12727.27 - 12000 = 727.27 Since 727.27\displaystyle 727.27 is not in the options A (8500\displaystyle 8500), B (10,000\displaystyle 10,000), C (9825\displaystyle 9825), it corresponds to None of these. Hence, **Option D** 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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