GROUP MEMBERS ROHAYAH AZIZ

D20051021459

NAZIRAH MAT TAHA

D20051021473

NUR MASTURA MOHD MUSA D20051021477

SCENARIO 1

SCENARIO 2

CHAPTER 11: INDEX NUMBER

FOR 4

M

INDEX NUMBER

Price Index Index Number

Composite Index

PRICE INDEX Price Index is a measure that is used to show the price change for certain goods at a given time

INDEX NUMBER Index Number is the comparison of a quantity at two different time and is expressed as a percentage.

Last year (2007) oil price is RM 1.92 and now (2008) it will increase to RM 2.70

ANSWER

Q1 = Price of goods at specific time

Oil Price 2008=RM 2.70 2007=RM 1.92

Ratio Form = 2008 2007 = 2.70 1.92

Q1 Q0 = Price of goods at base time

Q0

Convert to Percentages = 2.70 x 100 1.92 = 140.63

Increasing or Decreasing Price has increased by 40.63% with respect to the price at the base time.

I = Price index I= Q1 x 100 Q0

EXAMPLE

Q1 = Price of goods at specific time

Price of Goods A 2008=RM 1.90 2007=RM 2.00

Ratio Form = 2008 2007 = 2.00 1.90

Q1 Q0 = Price of goods at base time

Q0

Convert to Percentages = 2.00 x 100 1.90 = 95

Increasing or Decreasing Price has decreased by 5% with respect to the price at the base time.

I = Price index I= Q1 x 100 Q0

FORMULAE OF PRICE INDEX

Q I = Ă— 100 Q 1

0

I Q1

: Price Index : price of goods at specific time.

Q0

: price of goods at base time

Q I = Ă—100 Q 1

0

I Q1

: Index Number : Quantity at specific time.

Q0

: Quantity at base time

QUESTION 1

Umi’s height in the year 1993 and the year 2008 are 109 cm and 152 cm respectively. Calculate the index number of umi’s height in the year 2008 using the year 1993 as the base year. What can you say about umi’s height in that year.

2008 152 cm

1993 109 cm

QUESTION 1

Umi’s height in the year 1993 and the year 2008 are 109 cm and 152 cm respectively. Calculate the index number of umi’s height in the year 2008 using the year 1993 as the base year. What can you say about umi’s height in that year.

Let 1993: base year 2008: specific year

Let Q1: the umi’s height in 2008 Q0 : the umi’s height in 1993

• SOLUTION Let Q1: the umi’s height in 2008 Q0 : the umi’s height in 1993

Q I = ×100 Q 1

0

=

152 109

=

139.45

x 100

Conclusion The umi’s height has risen 39.45% in the year 2008 compared to the year 1993.

Question 2 There were 5000 books published in the year 2000 and 6000 books published in year 2005. Calculate the index number representing the change in the number of books published in the year 2005 based on the year 2000.

Question 2 There were 5000 books published in the year 2000 and 6000 books published in year 2005. Calculate the index number representing the change in the number of books published in the year 2005 based on the year 2000.

Let 2000: base year 2005: specific year Let Q1: number of books published in the year 2005 Q0 : number of books published in the year 2000

• SOLUTION Let Q1: number of books published in the year 2000. Q0: number of books published in the year 2005.

Q1 I= ×100 Q0 6000 = × 100 5000 = 120 Conclusion : The number of books published in year 2005 has increased by 20% with respect to the number of books published in the year 2000 .

1

2

3

QUESTION 2

QUESTION 3

QUESTION 4

QUESTION 5

QUESTION 1

QUESTION 8

QUESTION 7

QUESTION 6

CONCLUSION Q1 : Price of goods at specific time.

Q1 I= Ă—100 Q0

Q0 : Price of goods at base time

Q1 : Quantity at specific time. Q0 : Quantity at base time

Definition

PRICE INDEX

INDEX NUMBER

Price Index is a measure that is used to show the price change for certain goods at a given time

Index Number is the comparison of a quantity at two different time and is expressed as a percentage.

Formulae Q I = × 100 Q

Keyword

1

0

I : Price Index Q1 : price of goods at specific time. Q0 : price of goods at base time

Q I = × 100 Q 1

0

I : Index Number Q1 : quantity at specific time. Q0 : quantity at base time

- Profit index - Price index

- Number of….

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