# Index factor question

fizzyt
New MemberPosts:

**6**Registered
Please help me try to clarify something.

In practice simulations for Unit 7 I have come across a task that requires you to write the index factor used to restate the sales figures. I wrote as my answer the base index / current index x unadjusted sales figures eg. 184.6 / 173.8 x 152000.

Can someone please clarify to me which part of this equation is the index factor that was used??

In practice simulations for Unit 7 I have come across a task that requires you to write the index factor used to restate the sales figures. I wrote as my answer the base index / current index x unadjusted sales figures eg. 184.6 / 173.8 x 152000.

Can someone please clarify to me which part of this equation is the index factor that was used??

## Comments

207RegisteredHi,_

If you state the question as it is in the book ill try and find a solution for you! The imprssion im getting is that you need calculate the index factor which would usually be:

RPI at present - RPI at Original Date / RPI at original date = Index Factor

for example...

Sales figure in 1990 = £152,000

RPI - 1990 = 116.2

RPI - 1996 = 128.4

Solution.... (128.4-116.2) / 116.2 = .105 (Index Factor)

Therefore, £152,000 x .105 = £15,960

New total = (£152,000 + £15,960) = £167,960

Not sure why you would do this for sales though...

Anyways i hope this helps and apologies if ive mis-understood the question.

6Registered207RegisteredThe index factor from my example above is the (.105).

(Current RPI - Base RPI/Base RPI Index factor. I think this is what you are asking for.

But once your Index factor is calculated (.105) as above, you multiply it by your original figure, in this casy 152,000 and it gives you an addition due to inflation.

Apologies if ive mis understood!

6Registered