Question

If the prices of all commodities in a place have increased 1.25times in comparison to the base period, index number of prices of that place now is

Answer 1

Answer: THE ANSWER IS 225

Explanation:

We can assume base price as 100,

Hence 100+ 1.25(100) = 100 + 125 = 225.

Answer 2

Answer:

The index number of prices is 225.

Explanation:

In this question, we have to calculate the index number of the prices. The index number of prices means the price at which the household bought the commodities. In the question, it is given that the price of commodities increased 1.25 times as compared to the base price. To calculate the index price we assume that the base period price is 100. Hence, to calculate the index number of prices we use an equation:

$Price=100+1.25(100)$

$Price=225$

In this, the first 100 is used for the base period price of the commodities, and the 100 is used for the indexes.

Hence, the index number of prices is 225.

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