Index Numbers


Index Numbers

\(\blacksquare\) An index number is a measure that shows the change in a quantity at a specific time compared to the base time.
\(\blacksquare\) 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.
\(\blacksquare\) The formula for index number is

\(\boxed{ \begin{aligned} I&=\dfrac{Q_1}{Q_0} \times 100 \end{aligned}}\)



\(Q_0=\)quantity at the base time

\(Q_1=\)quantity at a specific time



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 \(2\,017\).

Based on the question,

\(Q_0=\)profit in the year \(2\,017\)

\(Q_1=\)profit in the year \(2\,019\)

Index number,

\(\begin{aligned} I&=\dfrac{Q_1}{Q_0} \times 100 \\\\&=\dfrac{78 \,000}{50 \,000} \times 100 \\\\ &=156. \end{aligned}\)