1. Find index number using Fixed base method by taking base year 2005
| Year | Price |
| 2005 | 1650 |
| 2006 | 1690 |
| 2007 | 1730 |
| 2008 | 1750 |
| 2009 | 1810 |
| 2010 | 1850 |
| 2011 | 1870 |
| 2012 | 1900 |
| 2013 | 1950 |
Solution:
1. Fixed base method :
`"Index Number I"=("Price of current year")/("Price of base year") xx 100`
We will find the fixed base index number by taking 2005 as base year
Base Price = 1650 for base year 2005
The index number will be taken as 100 for the price 1650 in the base year 2005
| Year | Price | Fixed base index number
base year `2005`
`=("Price of current year")/("Price of base year") xx 100` |
| 2005 | 1650 | `1650/1650 xx 100=100` |
| 2006 | 1690 | `1690/1650 xx 100=102.42` |
| 2007 | 1730 | `1730/1650 xx 100=104.85` |
| 2008 | 1750 | `1750/1650 xx 100=106.06` |
| 2009 | 1810 | `1810/1650 xx 100=109.7` |
| 2010 | 1850 | `1850/1650 xx 100=112.12` |
| 2011 | 1870 | `1870/1650 xx 100=113.33` |
| 2012 | 1900 | `1900/1650 xx 100=115.15` |
| 2013 | 1950 | `1950/1650 xx 100=118.18` |
This material is intended as a summary. Use your textbook for detail explanation.
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