Sum

**Find the Price Index Number using Simple Aggregate Method in the following example.**

Use 1995 as base year in the following problem.

Commodity |
A | B | C | D | E |

Price (in ₹) in 1995 |
42 | 30 | 54 | 70 | 120 |

Price (in ₹) in 2005 |
60 | 55 | 74 | 110 | 140 |

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#### Solution

Commodity |
Price in 1995(Base year) p_{0} |
Price in 2005(Current year)p_{1} |

A | 42 | 60 |

B | 30 | 55 |

C | 54 | 74 |

D | 70 | 110 |

E | 120 | 140 |

Total | 316 | 439 |

From the table, ∑ p_{0} = 316, ∑ p_{1} = 439

Price Index Number (P_{01}) = `(sum "p"_1)/(sum "p"_0) xx 100`

`= 439/316 xx 100`

= 138.92

Concept: Construction of Index Numbers

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