CA Foundation · Quantitative Aptitude · Index Numbers
The price of sugar was ₹40 per kg in 2020 and ₹50 per kg in 2024. Taking 2020 as the base year, what is the price index for 2024?
The price index is 125. This simple index uses the formula (P1/P0) × 100, where the price rose from ₹40 to ₹50, representing a 25% increase from the base period.
- A120
- B125Correct
- C130
- D135
Explanation
Price index = (Current year price / Base year price) × 100. Here, (50/40) × 100 = 125. Option A (120) results from incorrect division; option C (130) and D (135) come from arithmetic errors.
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