Index NumbersPYQ May 25Question 4396 of 197
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From the following data, find out an Index number for 2022 taking 2021 as base (using simple aggregative method): A (80, 120), B (220, 200), C (300, 400).

Options

A100
B120
C108
D190
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Correct Answer

✅ Option b — 120

All Options:

  • A100
  • B120
  • C108
  • D190

Detailed Solution & Explanation

Under the simple aggregative method, the price index is calculated using the formula:
Price Index (P0n)=ΣPnΣP0×100\text{Price Index } (P_{0n}) = \frac{\Sigma P_n}{\Sigma P_0} \times 100 Where:
- P0\displaystyle P_0 represents the prices in the base year (2021).
- Pn\displaystyle P_n represents the prices in the current year (2022).

Let us sum the prices for both years:
- For 2021 (Base Year, P0\displaystyle P_0):
ΣP0=PA+PB+PC=80+220+300=600\Sigma P_0 = P_{A} + P_{B} + P_{C} = 80 + 220 + 300 = 600 - For 2022 (Current Year, Pn\displaystyle P_n):
ΣPn=PA+PB+PC=120+200+400=720\Sigma P_n = P_{A} + P_{B} + P_{C} = 120 + 200 + 400 = 720
Now substitute these sums into the formula:
P0n=720600×100=1.2×100=120P_{0n} = \frac{720}{600} \times 100 = 1.2 \times 100 = 120
Hence, **Option B** 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

Index Number

A statistical device for measuring changes in the magnitude of a group of related variables (like prices or production) over time.

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More Questions from Index Numbers

In price index, when a new commodity is required to be added, which of the following index is used?

Fisher's ideal formula for calculating index number satisfies the ________

Shifted Price Index = Original Price IndexPrice Index of the year on which it has to be shifted×100\displaystyle \frac{\text{Original Price Index}}{\text{Price Index of the year on which it has to be shifted}} \times 100

If Laspeyres's Index Number is 250 and Paasche's Index Number is 160, then Fisher's Index number is

If ∑P0q0=240\displaystyle \sum P_0q_0 = 240, ∑P1q0=480\displaystyle \sum P_1q_0 = 480, ∑P0q1=600\displaystyle \sum P_0q_1 = 600 and ∑P1q1=192\displaystyle \sum P_1q_1 = 192, then Laspeyres's Index Number is

If ΣPnqn=249\displaystyle \Sigma P_n q_n = 249, ΣP0q0=150\displaystyle \Sigma P_0 q_0 = 150, ΣPnq0=145\displaystyle \Sigma P_n q_0 = 145 and Paasche's Index Number = 150, then Fisher's Ideal Price Index Number is

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