Scribd
Upload
10K views4 pages

Additional Mathematics: Index Numbers

The document discusses index numbers and composite indices. 1. An index number is calculated as the specific year quantity divided by the base year quantity, multiplied by 100. It shows the percentage change from the base year. 2. A composite index is calculated as the sum of price indices of each item multiplied by their respective weightages, divided by the sum of the weightages. 3. The example calculates index numbers, composite indices, and cost in different years using given price and quantity data for cake ingredients. The expected composite index for 2008, with a 40% cost increase from 2007, is 140.

Uploaded by

Sforazzura Suhaimi
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
10K views4 pages

Additional Mathematics: Index Numbers

The document discusses index numbers and composite indices. 1. An index number is calculated as the specific year quantity divided by the base year quantity, multiplied by 100. It shows the percentage change from the base year. 2. A composite index is calculated as the sum of price indices of each item multiplied by their respective weightages, divided by the sum of the weightages. 3. The example calculates index numbers, composite indices, and cost in different years using given price and quantity data for cake ingredients. The expected composite index for 2008, with a 40% cost increase from 2007, is 140.

Uploaded by

Sforazzura Suhaimi
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
You are on page 1/ 4

CHAPTER 11 : INDEX NUMBER

EXPRESS NOTES

1. Index Number , I

Q1
I X 100
Q0

Where Q0 = Quantity at the base year


Q1 = Quantity at specific year

Alternative Method: Using Index Box

Base Specific
Year Year
row for Quantity,
Q0 Q1 Price etc
ada perkataan 'base
year', index number
or price index mesti
100 I row for price index,
index number
100

Q0 Q1
 or Q0 xI  100Q1
100 I

2. Composite Index, I

I 
I Wi i

W i

where Ii = Price Index


Wi = weightage

S2FO2R – Search, Strategy, Formula, Operation, Output, Re-check


Q1: The mean electric bill of Ali increases from RM420 a month in 2006
to RM630 a month in 2009. Calculate the index number of the
electric bill of Ali in 2009 based on 2006.

2006 2009

Q1 420 630
100 I

420 I  100 x630


63000
I 
420
I  150

SECTION C
Q13: INDEX NUMBER TIPS
Table 3 shows the prices and the price indices for four
ingredients, J, K, L and M, used in making particular STEPS:
kind of cakes. Diagram 6 is bar chart which represents
the relative amount of the ingredients J, K, L and M, 1. To find Index Number, I
used in making these cakes. Use the formula:
Q
I  1 X 100 or
Prices per Prices Index Q0
kg(RM) for the for year
Ingredi year 2007 based Base year Specific year
ants 2003 2007 on year2003
Q0 Q1
J 0.40 0.60 150 100 I
K a 0.40 80
L 2.00 b 140 Q0 Q
M 0.80 1.00 c  1 , therefore
100 I
Table 3
Q
I  1 X 100
Q0
Where:
I = Index Number
Q0 & Q1 = Quantity / Price

S2FO2R – Search, Strategy, Formula, Operation, Output, Re-check


140
120
100
80
Amount 60
Used
40
20
0
J K L M
Ingredients

Diagram 6

a) Find the values of a, b and c.

b) i) Calculate the composite index for the cost of


making these cakes in year 2007 based on the
year 2003. 2. Composite Index,
__ I w i i
or
I  w i

ii) Hence, calculate the corresponding cost of


making these cakes in the year 2003 if the cost in Base year Specific year
the year 2007 was RM 3125. Q0 Q1
100 __

c) The cost of making these cakes is expected to I


increase by 40% from the year 2007 to the year
2008. Find the expected composite index for the 3. The value of weightage, wi,, usually
year 2008 based on the year 2003. given in types of bar chart, pie chart,
percentage or directly given.
SOLUTION:
TOTAL MARKS : 10
a)
2003 2007
a 0.40
100 80

a 0.4

100 80
40
a= = 0.50
80

S2FO2R – Search, Strategy, Formula, Operation, Output, Re-check


2003 2007
2.00 b
100 140

2.00 b

100 140

5b = 14
b = 2.80

2003 2007
0.80 1.00
100 c

0.80 c = 100(1.00)
c = 125

b) i)
_
(150 X 120)  (80 X 100)  (140 X 60)  (125 X 80)
I 
120  100  60  80

= 123.333

ii)
2003 2007
x 3125
100 123.333

123.333x = 3125 X 100


X = RM2533.78

d) cost in 2008 = 40% increases from RM2533.78


140
= X 2533.78
100
= RM 3547.29

2003 2008
2533.78 3547.29
100 y

2533.78 y = 100 X 3547.29


y = 140
 The expected composite index for 2008 = 140.

S2FO2R – Search, Strategy, Formula, Operation, Output, Re-check

You might also like