Index Numbers

Question 1

What are index numbers

Answer 1

Index numbers compare the price of an item with a base year price- its price in another year. The base year price has an index number of 100. Index numbers show the rate of change of price over time

Question 2

Index number formula

Answer 2

Index number= (price/base year price) x100

Question 3

Increase and decrease in index numbers

Answer 3

An index number greater than 100 shows an increase in value
An index number less than 100 shows a decrease in value