Simple Price Index or Price Relative

&NewLine;<&excl;-- WP QUADS Content Ad Plugin v&period; 2&period;0&period;95 -->&NewLine;<div class&equals;"quads-location quads-ad1" id&equals;"quads-ad1" style&equals;"float&colon;left&semi;margin&colon;0px 0px 0px 0&semi;">&NewLine;&NewLine;<&sol;div>&NewLine;<p align&equals;"justify">Simple price index is a percentage ratio that represents a comparison for a single commodity&period; For example&comma; let the price of a calculator is &dollar;60 in 2005 and &dollar;80 in 2006&period; To compare the two prices&comma; the price of one of the time periods is fixed as 100 and in this case it is the price of 2005&period; Therefore 2005 is base period and 60&dollar; is base price&period; Similarly 2006 is the current period and &dollar;80 is current price&period; This current price is now converted into percentage relative to the base price i&period;e&period; 80&sol;60&ast;100 &equals; 133&period;33&percnt;&period; This percentage is called price relative or simple price index&period; The concept of simple price index can be elaborated with the help of simple problem&period;<&sol;p>&NewLine;<p align&equals;"justify">&NewLine;<strong>Problem&colon;<&sol;strong> The prices of petrol for the period 1988 to 1990 are given below&colon;<&sol;p>&NewLine;<p align&equals;"justify">&&num;160&semi;<&sol;p>&NewLine;<p align&equals;"justify"><a href&equals;"http&colon;&sol;&sol;mba-lectures&period;com&sol;wp-content&sol;uploads&sol;2010&sol;06&sol;image109&period;png"><img title&equals;"image" style&equals;"border-top-width&colon; 0px&semi; display&colon; inline&semi; border-left-width&colon; 0px&semi; border-bottom-width&colon; 0px&semi; border-right-width&colon; 0px" height&equals;"240" alt&equals;"image" src&equals;"http&colon;&sol;&sol;mba-lectures&period;com&sol;wp-content&sol;uploads&sol;2010&sol;06&sol;image&lowbar;thumb109&period;png" width&equals;"213" border&equals;"0" &sol;><&sol;a> <&sol;p>&NewLine;<p align&equals;"justify">&&num;160&semi;<&sol;p>&NewLine;<p align&equals;"justify">Calculate price relatives taking &lpar;1&rpar; 1988 as base year &lpar;2&rpar; 1989 as base year &lpar;3&rpar; Chain base method&period; <&sol;p>&NewLine;<&excl;-- WP QUADS Content Ad Plugin v&period; 2&period;0&period;95 -->&NewLine;<div class&equals;"quads-location quads-ad2" id&equals;"quads-ad2" style&equals;"float&colon;none&semi;margin&colon;0px 0 0px 0&semi;text-align&colon;center&semi;">&NewLine;&NewLine;<&sol;div>&NewLine;&NewLine;<p><strong>Solution&colon;<&sol;strong><&sol;p>&NewLine;<p>The formula for calculating simple price index is given as&colon;<&sol;p>&NewLine;<p> &&num;160&semi;<&sol;p>&NewLine;<p> <a href&equals;"http&colon;&sol;&sol;mba-lectures&period;com&sol;wp-content&sol;uploads&sol;2010&sol;06&sol;image110&period;png"><img title&equals;"image" style&equals;"border-top-width&colon; 0px&semi; display&colon; inline&semi; border-left-width&colon; 0px&semi; border-bottom-width&colon; 0px&semi; border-right-width&colon; 0px" height&equals;"153" alt&equals;"image" src&equals;"http&colon;&sol;&sol;mba-lectures&period;com&sol;wp-content&sol;uploads&sol;2010&sol;06&sol;image&lowbar;thumb110&period;png" width&equals;"350" border&equals;"0" &sol;><&sol;a> <&sol;p>&NewLine;<p> &&num;160&semi;<&sol;p>&NewLine;<h3>1988 as Base Year<&sol;h3>&NewLine;<p> &&num;160&semi;<&sol;p>&NewLine;<p align&equals;"justify"><a href&equals;"http&colon;&sol;&sol;mba-lectures&period;com&sol;wp-content&sol;uploads&sol;2010&sol;06&sol;image111&period;png"><img title&equals;"image" style&equals;"border-top-width&colon; 0px&semi; display&colon; inline&semi; border-left-width&colon; 0px&semi; border-bottom-width&colon; 0px&semi; border-right-width&colon; 0px" height&equals;"226" alt&equals;"image" src&equals;"http&colon;&sol;&sol;mba-lectures&period;com&sol;wp-content&sol;uploads&sol;2010&sol;06&sol;image&lowbar;thumb111&period;png" width&equals;"240" border&equals;"0" &sol;><&sol;a> <&sol;p>&NewLine;<p align&equals;"justify">&&num;160&semi;<&sol;p>&NewLine;<h3>1989 as Base Year<&sol;h3>&NewLine;<p align&equals;"justify">&&num;160&semi;<&sol;p>&NewLine;<p align&equals;"justify"><a href&equals;"http&colon;&sol;&sol;mba-lectures&period;com&sol;wp-content&sol;uploads&sol;2010&sol;06&sol;image112&period;png"><img title&equals;"image" style&equals;"border-top-width&colon; 0px&semi; display&colon; inline&semi; border-left-width&colon; 0px&semi; border-bottom-width&colon; 0px&semi; border-right-width&colon; 0px" height&equals;"215" alt&equals;"image" src&equals;"http&colon;&sol;&sol;mba-lectures&period;com&sol;wp-content&sol;uploads&sol;2010&sol;06&sol;image&lowbar;thumb112&period;png" width&equals;"240" border&equals;"0" &sol;><&sol;a> <&sol;p>&NewLine;<p align&equals;"justify">&&num;160&semi;<&sol;p>&NewLine;<h3>Chain Base Method<&sol;h3>&NewLine;<p align&equals;"justify">&&num;160&semi;<&sol;p>&NewLine;<p align&equals;"justify"><a href&equals;"http&colon;&sol;&sol;mba-lectures&period;com&sol;wp-content&sol;uploads&sol;2010&sol;06&sol;image113&period;png"><img title&equals;"image" style&equals;"border-top-width&colon; 0px&semi; display&colon; inline&semi; border-left-width&colon; 0px&semi; border-bottom-width&colon; 0px&semi; border-right-width&colon; 0px" height&equals;"159" alt&equals;"image" src&equals;"http&colon;&sol;&sol;mba-lectures&period;com&sol;wp-content&sol;uploads&sol;2010&sol;06&sol;image&lowbar;thumb113&period;png" width&equals;"240" border&equals;"0" &sol;><&sol;a> <&sol;p>&NewLine;<p align&equals;"justify">&&num;160&semi;<&sol;p>&NewLine;<h3>Summary of Results<&sol;h3>&NewLine;<p> &&num;160&semi;&NewLine;<&excl;-- WP QUADS Content Ad Plugin v&period; 2&period;0&period;95 -->&NewLine;<div class&equals;"quads-location quads-ad3" id&equals;"quads-ad3" style&equals;"float&colon;none&semi;margin&colon;0px&semi;">&NewLine;&NewLine;<&sol;div>&NewLine;&NewLine;