index numbers help!!?
chloe06
Registered Posts: 2
Can someone please help with Sample paper 1 level 4 AAT 1 (e) please I cannot work it out? I know its simple and I'm thinking about it too much.....
0
Best Answer

Hi Chloe
Ok hopefully this will make sense!
Forecast year 2
At year 1 prices = take to volume index for year 2 / volume index year 1 (base) * year one actual price ( base)
148/140*384,000 = 405943
To go along the rest of the line change the first index i.e 148 for the corresponding index for the year
At expected price = this is exactly the same process but rather than multiply using the base price of £384,000 we need to find out what the expected price is by using the sales price index to get the new sales value for each year
so for example ...
Year 2 expected price
115/112*384,000 = 394,286
now we use that figure against the volume indexes
148/140*394,286 = 416816
Hope this has helped2
Answers

Thank you! I finally get it!0

Hi, I am doing the same question and I am struggling to see how to keep going. I get the explanation of working out the year 2 expected price but I can’t seem to use the formula for years 3,4 etc. This is really frustrating me that I can’t get this. Could you help please?0

For "At expected prices" at Year 3 I'm getting a different figure using your calculation...
120/115 * 405,943 = 423,593
152.6/148 * 423,493 = 436,758??
The answer for year 3 should be 448,457
Thanks so much in advance!0
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