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| \(\blacksquare\) An index number is a measure that shows the change in a quantity at a specific time compared to the base time. |
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| \(\blacksquare\) The value of the quantity at the base time is conventionally given the number \(100\), and the index number of any other time is in proportion with it. |
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| \(\blacksquare\) The formula for index number is |
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\(\boxed{ \begin{aligned} I&=\dfrac{Q_1}{Q_0} \times 100 \end{aligned}}\)
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where
\(Q_0=\)quantity at the base time
\(Q_1=\)quantity at a specific time
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Example:
A school canteen made a profit of \(\text{RM }50 \,000\) in the year \(2\,017\) and \(\text{RM }78 \,000\) in the year \(2\,019\).
Calculate the index number to show the change in profit for the school canteen in the year \(2\,019\) based on the year \(2\,017\).
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| Based on the question, |
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\(Q_0=\)profit in the year \(2\,017\)
\(Q_1=\)profit in the year \(2\,019\)
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| Index number, |
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\(\begin{aligned} I&=\dfrac{Q_1}{Q_0} \times 100 \\\\&=\dfrac{78 \,000}{50 \,000} \times 100 \\\\ &=156. \end{aligned}\)
