Quantitative Methods

Question 1

What are the characteristics of index numbers?

Answer 1

-No units (e.g. £, €, $).
-Base value has an index value of 100.

Question 2

What is the formulae for index numbers?

Answer 2

Index Number = Current Figure/Figure In Base Time Period X 100

Question 3

At a cinema, the price of a ticket rose from £5 in 2014 to £6.15 in 2015.
Calculate an index number for the cinema ticket price in 2015, taking 2014 as the base year.

Answer 3

2014: £5. (Index: 100).
2015: £6.15.

£6.15/5 X 100 = 123 (index number).

23% price increase.