index numbers help!!?

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.....

Best Answer

  • EHarris
    EHarris Registered Posts: 3
    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 helped :)


  • chloe06
    chloe06 Registered Posts: 2
    Thank you! I finally get it!
  • MatthewSherwood
    MatthewSherwood Registered Posts: 1
    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?
  • AngelDust
    AngelDust Registered Posts: 30
    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!
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