Thread: URGENT: Index Numbers help needed!

Sorry that this is such a long winded question, but I've been puzzling over this for hours now and still can't understand it in the slightest and... well... time is becoming slim! XD

So, I was wondering if anyone could explain to me how to do this question;

Q. An index of prices based on the year 2000 is shown as follows...

Year-----Index
2003--------------111
2004--------------117
2005--------------124
2006--------------132

1. What is the percentage increase in prices between 2000 and 2005?
2. What is the percentage increase in prices between 2003 and 2006?
3. The index number is forecast to increase by 5% of its value each year over the next 2 years. Calculate the index number in 2007 and 2008.

I know it's alot and I'm sorry. I'll be really grateful if anyone can help though. I really do not understand index numbers at all...

p.s. am I right in thinking 2000's index should be 100?

I believe 2000's index is 99. The pattern is 99+3=102 which is 2001's index. 102+4=106 which is 2002's index. and you can see that pattern continues all the way up to 2006. see if you cannot figure out the percentage portions though, before looking for a little more help. Remember the definitions of what a percentage is. 3 is 150% of 2...aka 2*1.5=3.

Thanks alot.
I'm still confused because I thought the base year had to be 100...
But I'll go with that and see if it starts to make more sense
Thankyou.

Any more help from people will be appreciated also.

you may be right about 100. I never did indexes...I just looked at the pattern. But reading it again, an index number seems likely to imply a base of 100. I'll google, and see what I can get.

yes you're right it should be 100. However, keep in mind what I said about percentages and I think you'll find the rest of the problems to be simple. I'll check back in a few minutes; write if you figure it out, or are stuck.

Thanks for this, you've been very helpful thus far!
But... I've just been trying to work it out and I still don't understand how you get the percentage increase

This is such a BAD area of maths for me

Base: 10 units
1st week: 12 units

% increase from the base to 1st week= 1-12/10= 2/10 or 20% increase. That may pretty much give it away, but good luck.