Stuck- index of prices
Primble
Registered Posts: 734 Epic contributor 🐘
Hi, Am doing a question and i cannot get my head around this.
Turnover for last three years was
2002 £1130000
2003 £1175000
2004 £1210000
general index of prices
2002 = 108.2
2003 = 110.5
2004 = 112.9
restate the turnover for 2002,2003.2004 in terms of 2002 prices.
would it be
2002 £1130000
2003 (£1175000 x 1.1082)= 1302135
2004 (1210000x1.1082)=1340922
is this right?
Turnover for last three years was
2002 £1130000
2003 £1175000
2004 £1210000
general index of prices
2002 = 108.2
2003 = 110.5
2004 = 112.9
restate the turnover for 2002,2003.2004 in terms of 2002 prices.
would it be
2002 £1130000
2003 (£1175000 x 1.1082)= 1302135
2004 (1210000x1.1082)=1340922
is this right?
0
Comments
-
The index has gone up in both years therefore when we adjust the 2003/4 prices they should end up lower when we consider them in 2002. This is because the turnover in later years has been inflated by the increase in the price index.
You also need to consider that in 2003 the base was 108.2.
(price/index for that year) x index for base year.
2003 £1175000 / 110.5 * 108.2 = 1150543
2004 £1210000 / 112.9 * 108.2 = 11596280
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