calculating index numbers

• used to compare price changes over time
• simple index numbers compare the price change of an item within its base year price
• The index number for each year is that year’s price as a percentage of its base year price
• The base year price has index number of 100 (meaning 100%) – this is the original amount
• 𝑰𝒏𝒅𝒆𝒙 𝑵𝒖𝒎𝒃𝒆𝒓 = 𝑷𝒓𝒊𝒄𝒆/𝑩𝒂��𝒆 𝒀𝒆𝒂𝒓 𝑷𝒓𝒊𝒄𝒆 × 𝟏𝟎0
• Index numbers show rates of change:

  • If the index number is >100, the value has increased.
  • If the index number is <100, the value has decreased