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Math Help - price index

  1. #1
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    price index

    if price index for march is 107.9 how do I work out price of petrol
    jan base month 100
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  2. #2
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    Quote Originally Posted by bobbie bruce View Post
    if price index for march is 107.9 how do I work out price of petrol
    jan base month 100
    The actual wording of the problem would be very beneficial. What is it you are trying to do?

    Dec Unknown
    Jan 100.0
    Feb Unknown
    Mar 107.9
    Apr Unknown

    Do you need to Interpolate February?
    Do you need to Extrapolate December or April?
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  3. #3
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    For future reference, feel free to provide additional information here in the public forum. Waiting on just one person may not be particularly expedient.

    See how important it is to give ALL the information?

    I'm guessing these are prices.
    Jan 88.9
    Mar 89.9
    May 94.8

    These are indices.
    Jan base month price index 100
    Price index for June 107.9

    The question wants a price.
    What is the price of petrol in June

    The idea of a "Price Index" is to pick a point and call that the base, then adjust everything else to conform to that base.

    Jan Price * (some factor) = Jan Index = 100

    We just need to discover the "some factor".

    In this case, division should be sufficient: 100/88.9 = 1.12486

    You should now be able to use this factor to convert between prices and indeces based on January.

    Price to Index
    Mar 89.9 (multiply by 1.12486) ==> 101.1
    May 94.8 (multiply by 1.12486) ==> 106.6

    Index to Price
    June 107.9 (divide by 1.12486) ==> 95.9

    Note: I'm still just guessing in at least three places. If we don't yet match the book, you'll have to provide better information.
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  4. #4
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    many thanks for your reply. My computer crashed and I lost all work. I now can understand what you are telling me.If I was half as clever as you I could manage all these questions. again thanks
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