The price index of sugar in 2019 compared to 2016 is 120. If the cost of sugar was ₹25 per kg in 2016 then the cost in 2019 is :
Answer & explanation
Correct answer: option 1
Price index formula
$\text{Price Index}=\frac{\text{Price in current year}}{\text{Price in base year}}\times100$
Given
Price index $=120$
Price in 2016 $=25$
$120=\frac{\text{Price in 2019}}{25}\times100$
$\frac{\text{Price in 2019}}{25}=\frac{120}{100}$
$\text{Price in 2019}=25\times1.2$
$=30$
The cost of sugar in 2019 is ₹30 per kg.