Question
Calculate Value Index number from the given data:
✓
Answer
Steps:
(1) Formula used for Value Index Number
$= V_{01} = Zpq x 100$
(2) We find product of prices and their respective quantities of the different commodities for the base year to derive p0q0, then take the sum total of the products to derive $Zp0q0$.
(3) Similarly, find the product of prices and their respective quantities for the current year to derive $p1q1$, then take the sum total of the products to derive $p_1q_1$.
$\begin{aligned} & \text { Value Index Number }=\frac{\Sigma p_1 q_1}{\Sigma p_0 q_0} \times 100 \\ & =\frac{6,540}{1,890} \times 100 \\ & =346.03\end{aligned}$Value Index Number = 346.03
(1) Formula used for Value Index Number
$= V_{01} = Zpq x 100$
(2) We find product of prices and their respective quantities of the different commodities for the base year to derive p0q0, then take the sum total of the products to derive $Zp0q0$.
(3) Similarly, find the product of prices and their respective quantities for the current year to derive $p1q1$, then take the sum total of the products to derive $p_1q_1$.
$\begin{aligned} & \text { Value Index Number }=\frac{\Sigma p_1 q_1}{\Sigma p_0 q_0} \times 100 \\ & =\frac{6,540}{1,890} \times 100 \\ & =346.03\end{aligned}$Value Index Number = 346.03
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