The wholesale price of a straight-back desk chair in 2004 was $70; in 2005,$80.50; and in 2006,$63. What were the indexes for 2005 and 2006 using 2004 = 100?
A)115.0 and 90.0
B)1.15 and 0.9
C)1,150.0 and 900.0
D)87.0 and 111.1

Question

Quizplus · Accepted Answer

The index for a given year is calculated by taking the price for that year, dividing it by the base year price (2004 in this case), and then multiplying by 100. For 2005, the index is (80.50 / 70) * 100 = 115.0. For 2006, it is (63 / 70) * 100 = 90.0.

The Wholesale Price of a Straight-Back Desk Chair in 2004