Paper 4: Fundamentals of Business Mathematics & Statistic

7.26 I FUNDAMENTALS OF BUSINESS MATHEMATICS AND STATISTICS

Index Numbers

u Fisher’s ‘Ideal’ Method

01 1 0^11

0 0 0 1

Q = ΣΣq p q pq p q p×ΣΣ × 100

u Marshall-Edgeworth Method

1 1 2

(^0112)
0

Q^2100

2

Σ^ +^

(^)
= + ×
Σ (^)
q p p
q p p
u Kelly’s Method
01 1
0
Q = ΣΣq pq p × 100
B. WEIGHTED AVERAGE OF RELATIVE METHOD
u When Arithmetic mean is used for averaging
01

Q QV

V

= Σ

Σ

where Q =^10 ×

q

q 100 & V = q^0 p^0

u When Geometric mean is used for averaging

( )

01

Q antilog= log Q× υ

Συ

VALUE INDEX NUMBER

01 1 1

0 0

V =ΣΣp qpq × 100

CONSUMER PRICE INDEX

u Aggregate Expenditure Method

Consumer Price Index =^1 0 0^0100

Σ ×

Σ

pq

p q

u Family Budget Method

Consumer Price Index = ΣΣPVV

CHAIN INDEX NUMBERS

Chain Index = Current year link relative Previous year chain 100 × index