Paper 4: Fundamentals of Business Mathematics & Statistic

FUNDAMENTALS OF BUSINESS MATHEMATICS AND STATISTICS I 7.21

Table : Calculation of Chain Base Index

Year Price Linke Relative Chain Indices (2005 = 100)

2005 60 100 100

2006 62 6260 x 100 = 103.33 103.33

2007 65 6562 x 100 = 104.83 104.83 103.33 100 × = 108.32

2008 72 7265 x 100 = 110.76 110.76 108.32 100 × = 119.98

2009 75 7572 x 100 = 104.16 104.16 119.98 100 × = 124.97

2010 80 8075 x 100 = 106.66 106.66 124.97 100 × = 133.29

2011 82 8280 x 100 = 102.5 102.5 133.29 100 × = 136.62

2012 85 8582 x 100 = 103.65 103.65 136.62 100 × = 141.61

Note: The results obtained by the fixed base & chain base are almost similar. The difference is only due to
approximation. Infact the chain base index numbers are always equal to fixed base index numbers
if there is only one series.
Example 9 :
From the following data compute chain base index number & fixed base index number.
Group 2008 2009 2010 2011 2012
I 6 9 12 15 18
II 8 10 12 15 18
III 12 15 24 30 36
Solution:
Table : Computation of Chain Base Index Number
Calculation of Link Relatives
Group 2008 2009 2010 2011 2012

I 100 69 x100 =150^129 x 100 =133.33^1512 x 100 =125^1815 x 100 =120

II 100 108 x 100 =125^1210 x 100 =120^1512 x 100 =125^1815 x 100 =120

III 100 1512 x 100 =125^2415 x 100 =160^3024 x 100 =125 3036 x 100 =120