Budgeting  indexed sales question
AATchick
Registered Posts: 89 Epic contributor 🐘
Hi All, I wonder if any of you can help me please? I have a question that I simply cannot get my head around and I've checked the answers and have no idea how they have been calculated!!
So the basic principle of index numbers that I have been taught is
Historical price x (index of time converting to / index of time converting from)
So here are the details
Q; calculate the value of sales for each year at 2009 prices to the nearest £.
YEAR RPI SALES INDEXED SALES
2000 170.3 2013000
2001 173.3 2015500
2002 176.2 2102700
2003 181.3 2240000
2004 186.7 2235000
2005 192.0 2555000
2006 198.1 2850000
2007 206.6 2880000
2008 214.8 2901000
2009 213.7 2902500
The answers are telling me;
2000 = 0
2001 = 2151005
2002 = 2137887
2003 = 2304835
2004 = 2301569
2005 = 2627531
2006 = 2940547
2007 = 3003574
2008 = 3016141
2009 = 2887636
Can anyone help me understand these answers or are they wrong? I have been using 2013000 * (213.7 / 170.3) to get the answer of 2526002 for 2000 but apparently it's not right.
If anyone could help me understand this is be really really grateful :) x
Thank you :) xxx
So the basic principle of index numbers that I have been taught is
Historical price x (index of time converting to / index of time converting from)
So here are the details
Q; calculate the value of sales for each year at 2009 prices to the nearest £.
YEAR RPI SALES INDEXED SALES
2000 170.3 2013000
2001 173.3 2015500
2002 176.2 2102700
2003 181.3 2240000
2004 186.7 2235000
2005 192.0 2555000
2006 198.1 2850000
2007 206.6 2880000
2008 214.8 2901000
2009 213.7 2902500
The answers are telling me;
2000 = 0
2001 = 2151005
2002 = 2137887
2003 = 2304835
2004 = 2301569
2005 = 2627531
2006 = 2940547
2007 = 3003574
2008 = 3016141
2009 = 2887636
Can anyone help me understand these answers or are they wrong? I have been using 2013000 * (213.7 / 170.3) to get the answer of 2526002 for 2000 but apparently it's not right.
If anyone could help me understand this is be really really grateful :) x
Thank you :) xxx
0
Comments

hi AATchick
Without delving too deeply, the answers look dubious to me. The 2009 figure should be identical in both case as you should be dividing and multiplying by the same index number. And how can the value for 2000 be zero? It doesn't make sense. What is the source  textbook, web site?0 
Thanks for replying wabisabi, the answers are from my aat training provider, which is what worries me!!
Can you advise how you would work out one of them and perhaps I could go back and explain why the answer is different to theirs?
Thank you for your time :)0 
I agree with your calculation and workings. I was taught the same method
0 
Thank you for confirming, I'll submit my answers and go from there if they come back incorrect. Thanks for your help :)0
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