CA Foundation · Quantitative Aptitude · Index Numbers
The cost of living index (base 2015 = 100) was 200 in 2020 and 250 in 2024. A clerk earned ₹40,000 per month in 2020. What monthly salary in 2024 would keep his real income the same as in 2020?
He needs ₹50,000 per month. To preserve real income the salary must rise in the same proportion as the cost of living index, so 40,000 multiplied by 250/200 gives ₹50,000, and both years then show a real income of 200 index-adjusted units.
- A₹44,000
- B₹48,000
- C₹50,000Correct
- D₹55,000
Explanation
Required salary = 40,000 × 250/200 = ₹50,000. Check: real income 40,000/200 = 200 and 50,000/250 = 200, equal. Using the difference of 50 points as a percentage on 40,000 gives a wrong figure.
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