Question

Calculate the consumer price index for the year 1998 :

$\begin{array}{cccc}\text{Items}& \text{Quantity}& \text{Price (1997)/Unit}& \text{Price (1998)/Unit}\\ \text{Rice}& 40& 16.00& 20.00\\ \text{Wheat}& 25& 40.00& 60.00\\ \text{Pulses}& 5& 0.50& 0.50\\ \text{Oil}& 20& 5.12& 6.25\\ \text{Soap}& 10& 2.00& 1.50\end{array}$

Answer 1

$\begin{array}{cccccc}\text{Items}& \text{Quantity}\left(Q_0\right)& \underset{/Unit\left(P_0\right)}{\text{Price (1997)}}& \underset{/Unit\left(P_1\right)}{\text{Price (1998)}}& P_0{Q}_0& P_1{Q}_0\\ \text{Rice}& 40& 16.00& 20.00& 640& 800\\ \text{Wheat}& 25& 40.00& 60.00& 1000& 1500\\ \text{Pulses}& 5& 0.50& 0.50& 2.5& 2.5\\ \text{Oil}& 20& 5.12& 6.25& 102.4& 125.0\\ \text{Soap}& 10& 2.00& 1.50& 20.00& 15.00\\ & & & & \sum P_0{Q}_0=1764.9& \sum P_1{Q}_0=2442.5\end{array}$

CPI = $\frac{\sum P_1{Q}_0}{\sum P_0{Q}_0}\times 100=\frac{2442.5}{1764.9}\times 100=138.39$