Question

a) Calculate all the simple price indexes by using 2018 as the base year.b) Calculate the percentage change from 2020 to 2021.

Answer 1

Given:

Required:

Calculate all the simple price indexes by using 2018 as the base here.

Step-by-step explanation:

The index formula is given as:

`Price\text{ index I= }\frac{cost\text{ in the current year}}{cost\text{ of the base year}}*100`
`\begin{gathered} I_(2018)=(1328)/(1328)*100 \\ I_(2018)=100 \end{gathered}`
`\begin{gathered} I_(2019)=(1294)/(1328)*100 \\ I_(2019)=97.44 \end{gathered}`
`\begin{gathered} I_(2020)=(1562)/(1328)*100 \\ I_(2020)=117.62 \end{gathered}`
`\begin{gathered} I_(2021)=(1949)/(1328)*100 \\ I_(2021)=146.76 \end{gathered}`

(b) Percent change formula is given as:

`Percent\text{ change = }\frac{V_2-V_1}{\lvert{V_1}\rvert}\text{ }*100`

Where v1 and v2 are the values.

`\begin{gathered} Percentage\text{ Change = }(1949-1562)/(1562)*100 \\ Percentage\text{ Change = }(387)/(1562)*100 \\ Percentage\text{ Change =24.76\%} \end{gathered}`

Final Answer:

(a)

`\begin{gathered} I_(2018)=100 \\ I_(2,019)=97.44 \\ I_(2,020)=117.62 \\ I_(2,021)=146.76 \end{gathered}`

(b) Percentage change = 24.76%