Index Numbers

1. Table 1 shows the prices and the price indices of four types of food items in 2006 based on
2004. Diagram 1 shows the pie chart that reflects the proportion of expenditure of Puan
Batrisya in 2004

Price index in 2006

Price
Food item based on 2004
2004 2006
P RM 7.20 120
Q RM 5.00 110
R RM 4.00 RM 5.20 130
S RM 7.00 RM 9.10

Table 1

P
Diagram1 R

(a) Find the values of and [4 marks]

(b) Calculate the price index of P in the year 2004 based on the year 2002 if the price of
P in the year 2002 is RM 5.45 [3 marks]
(c) Find the composite index for the four types of food [3 marks]

2. Table 2 shows the price indices in the year 2007 based to the year 2006, of four different
materials A, B, C and D in the production of a type of a shampoo. It also includes the division
of the usages of the materials in the production of the shampoo.

Price Index 2007

Material Weightage
(2006 = 100)
A 125 4
B 120
C 80 5
D 150
Table 2
(a) If the price of material A is RM 50 in the year 2007, calculate its price in 2006
[2 marks]
(b) If the composite index for the year 2007 based to the year 2006 is 120, find the
value of . [2 marks]
(c) Find the price of the shampoo in 2007 if its price in 2006 was RM 15.
[2 marks]
(d) Given that the price of material C is estimated to increase by 15% from the year
2007 to 2008, while the others remain unchanged. Calculate the composite index of
the shampoo in the year 2008, based on the year 2006. [4 marks]

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 Index Numbers

3. A healthy yogurt drink is mixed by using four different fruits, A, B, C and D. Table 3 shows the
prices, per kg, of the fruits used.

Price per kg (RM)

Fruits
Year 2005 Year 2007
A 8.00
B 15.00 16.50
C 4.50
D 2.40

Table 3
(a) Given that the index number of fruit A used in the year 2007 based on the year 2005
is 140, calculate the value of . [2 marks]

(b) Given that the price index of fruit C for the projected year 2009 based on the years
2007 and 2005 are 120 and 180 respectively, find . [4 marks]

(c) The amount of fruits A, B, C and D used in the healthy yogurt drink is in the ratio of
. Given that the composite index of the yogurt drink for the year 2007
based on the year 2005 is 122, find
(i) the value of
(ii) the price of a glass of the healthy yogurt drink in the year 2005 if the price of
the same drink is RM 7.50 in the year 2007. [4 marks]

4. Table 4 shows the price indices and the weightages of four items used in a production of an
electrical device in the year 2008 based on the year 2006.

Price index for

Items 2008 based on Weightage
2006
P 6
Q 110 4
R 140
S 125 5

Table 4
(a) Given that the prices of item P in the year 2006 and 2008 are RM 25 and RM 55
respectively and the composite index of these items for the year 2008 based on
2006 is 154.25, find
(i) the value of and
(ii) the total cost of production of the electrical device in 2008 if the
corresponding cost was RM 1 080 in 2006 [6 marks]

(b) It is predicted that the price indices for items P and R will increase by 10% and 5%
respectively from 2008 to 2010 whereas for item Q, the price index decreases 15%
while for item S, it remains unchanged. Calculate the composite index for the year
2010 based on 2006 by using the values of and obtained in (a) [4 marks]

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 Index Numbers

Answer:
Question 1
(a)
(b) 110.1
(c) 121.7

Question 2
(a) RM40
(b) p=3
(c) RM18
(d) 150

Question3
(a)
(b)
(c) (i) (ii)

Question 4
(a) (i) (ii) RM 1665.90
(b) 156.18

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