CA Foundation · Quantitative Aptitude · Index Numbers
The price index for 2020 with base 2015 = 100 is 150, and the price index for 2023 on the same base is 210. If the base year is shifted to 2020 (2020 = 100), what is the index for 2023?
The 2023 index on the 2020 base is 140. When shifting the base, divide the old 2023 index (210) by the old index of the new base year (150) and multiply by 100. Index numbers compare ratios, so simple subtraction gives wrong results.
- A60
- B140Correct
- C160
- D110
Explanation
Base shifting: new index = old index of the given year ÷ old index of the new base year × 100 = 210 ÷ 150 × 100 = 140. Subtracting (210 − 150 = 60) or adding the difference to 100 (160) is wrong because index numbers are ratios, not differences.
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