index numbers help!!?

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

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?