Based on the data on the expenses of middle-class families in a certain city, calculate the cost-of-living index during the year 2003 as compared with 1990:
|
Expenses |
Year |
Food |
Fuel |
Clothing |
Rent |
Miscellaneous |
|
Price (in ₹) |
2003 |
1500 |
250 |
750 |
300 |
425 |
|
Price (in ₹) |
1990 |
1400 |
200 |
400 |
200 |
250 |
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → 131.63
The Cost-of-Living Index ($I$) is calculated as:
$I = \frac{\sum P_1}{\sum P_0} \times 100$
Where:
- $\sum P_1$ = Total expenses in the current year (2003)
- $\sum P_0$ = Total expenses in the base year (1990)
Calculation Table
|
Expense Category |
Price in 1990 ($P_0$) |
Price in 2003 ($P_1$) |
|
Food |
1400 |
1500 |
|
Fuel |
200 |
250 |
|
Clothing |
400 |
750 |
|
Rent |
200 |
300 |
|
Miscellaneous |
250 |
425 |
|
Total |
$\sum P_0 = 2450$ |
$\sum P_1 = 3225$ |
Apply the formula:
$I = \frac{3225}{2450} \times 100$
$I \approx 1.31632 \times 100$
$I = 131.63$